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Theoretical calculations have been carried out to study the mechanism of intermolecular hydroacylation of acetylene with acetaldehyde. The results indicate that the generally accepted mechanism, C–H oxidative addition followed by hydrometallation and reductive elimination, is the most favorable pathway. The intermolecular hydroacylation reaction of acetylene is shown to suffer from three problems: (1) the formation of a stable bis-acetylene intermediate, which leads to a facile dimerization side-reaction; (2) higher activation barrier of the rate-determining C–H (carbonyl) bond activation; and (3) "fatal" easy decarbonylation from hydrometalated intermediate and subsequent reductive elimination to give decarbonylation product. Our calculations indicate that the above three problems can all be overcome by the use of a tethered carbonyl substrate with a chelation-forming basic donor ligand such as alkylthio group.