Functional group metathesis is an emerging field in organic chemistry with promising synthetic applications. However, no complete mechanistic studies of these reactions have been reported to date, particularly regarding the nature of the key functional group transfer mechanism. Unraveling the mechanism of these transformations would not only allow for their further improvement but would also lead to the design of novel reactions. Herein, we describe our detailed mechanistic studies of the nickel-catalyzed functional group metathesis reaction between aryl methyl sulfides and aryl nitriles, combining experimental and computational results. These studies did not support a mechanism proceeding through reversible migratory insertion of the nitrile into a Ni-Ar bond and provided strong support for an alternative mechanism involving a key transmetalation step between two independently generated oxidative addition complexes. Extensive kinetic analysis, including rate law determination and Eyring analysis, indicated the oxidative addition complex of aryl nitrile as the resting state of the catalytic reaction. Depending on the concentration of aryl methyl sulfide, either the reductive elimination of aryl nitrile or the oxidative addition into the C(sp2)-S bond of aryl methyl sulfide is the turnover-limiting step of the reaction. NMR studies, including an unusual 31P-2H HMBC experiment using deuterium-labeled complexes, unambiguously demonstrated that the sulfide and cyanide groups exchange during the transmetalation step, rather than the two aryl moieties. In addition, Eyring and Hammett analyses of the transmetalation between two Ni(II) complexes revealed that this central step proceeds via an associative mechanism. Organometallic studies involving the synthesis, isolation, and characterization of all putative intermediates and possible deactivation complexes have further shed light on the reaction mechanism, including the identification of a key deactivation pathway, which has led to an improved catalytic protocol.