Details of a quantum mechanics/molecular mechanics (QM/MM) study aimed at determining how the substituents of the spectator phosphine ligands influence the energetics of the key step in olefin hydroformylation, the insertion of an olefin into the Rh–H bond of HRh(PR3)2(CO)(η2-olefin), are discussed. For ethylene there are a total of three insertion pathways originating from the two η2-ethylene isomers, with either a bis-equatorial arrangement (ee) or a mixed equatorial, axial arrangement (ea) of the two PR3 ligands. The energetics, kinetic and thermodynamic, of these three pathways were computed for a variety of phosphine substituents (PR3; R = Me, tBu, Ph, meta-PhSO3−, and para-PhSO3−) using the ONIOM
QM/MM approach. These calculations predict that two reaction channels, one originating from the more stable ea
η2-ethlyene adduct and the other from the less stable ee
η2-ethylene adduct, will be operative for the ethylene insertion reaction with the PMe3 ligand system, although the latter will be preferred thermodynamically over the former. In the case of the aryl phosphine ligands, a clear energetic preference, kinetically and thermodynamically, was found for ethylene insertion to proceed from the least stable ee ethylene adduct versus the paths originating from the more stable ea ethylene adduct.