The mechanism of nickel-catalyzed reductive alkyne−aldehyde coupling reactions has been investigated using density functional theory. The preferred mechanism involves oxidative cyclization to form the nickeladihydrofuran intermediate followed by transmetalation and reductive elimination. The rate-and selectivity-determining oxidative cyclization transition state is analyzed in detail. The d → π* back-donation stabilizes the transition state and leads to higher reactivity for alkynes than alkenes. Strong Lewis acids accelerate the couplings with both alkynes and alkenes by coordinating with the aldehyde oxygen in the transition state.