The reaction rate of the oxidative addition and CO insertion steps of methyl iodide with [Rh(PhCOCHCOPh)(CO)(P(OCH2)3CCH3)] are presented. Large negative experimental values for the activation entropy and results from a density functional theory computational chemistry study indicated trans addition of the CH3I to [Rh(PhCOCHCOPh)(CO)(P(OCH2)3CCH3)]. A study of the molecular orbitals gives insight into the flow of electrons during the oxidative addition reaction. CO insertion leads to a square pyramidal [Rh(PhCOCHCOPh)(P(OCH2)3CCH3)(COCH3)(I)] acyl product with the COCH3 moiety in the apical position. The strong electron donation of the P(OCH2)3CCH3 ligand accelerates the oxidation addition step of methyl iodide to [Rh(PhCOCHCOPh)(CO)(P(OCH2)3CCH3)] by ca. 265 times faster (at 35°C) than that of the Monsanto catalyst, but inhibits the CO insertion step.