AbstractIn this article, mechanisms of phosphine‐catalyzed [4 + 3] annulation of allenoates with C, N‐cyclic azomethine imines have been investigated using density functional theory. The catalytic cycle for the title reaction consists of five steps. Namely, the first step is the nucleophilic addition of phosphine catalyst, the second one is the CC bond formation, the third one is the proton transfer process, and the next one is the ring‐closure process, the last one is dissociation of the catalyst and the product generation. The calculated results indicate that the nucleophilic addition of phosphine catalyst is rate‐determining. With the use of Cat as the chiral catalyst, optically active products were obtained in good yields with excellent enantioselectivities while the CC bond formation is stereoselectivity‐determining. Furthermore, the theoretically predicted the main product is SS configuration, which is in good agreement with the experimental results. The special role of the catalysts and origin of stereoselectivity was also identified by NBO, GRI, and FMO analyses. This work might be helpful for understanding the significant roles of phosphine catalyst and thus provide valuable insights on the rational design of potential catalysts for this kind of reactions.