Density functional theory calculations have been employed to investigate the mechanism of gold(I)-catalysed rearrangements of cyclopropenes. Product formation is controlled by the initial ring-opening step which results in the formation of a gold-stabilised carbocation/gold carbene intermediate. With 3-phenylcyclopropene-3-methylcarboxylate, the preferred intermediate allows cyclisation via nucleophilic attack of the carbonyl group and hence butenolide formation. Further calculations on simple model systems show that substituent effects can be rationalised by the charge distribution in the ring-opening transition state and, in particular, a loss of negative charge at what becomes the β-position of the intermediate. With 1-C₃H₃R cyclopropenes (R = Me, vinyl, Ph), ring-opening therefore places the substituent at the β-position.