Converting excess CO2 into chemically valuable products is a promising routine for sustainable development. Catalyzing epoxides and CO2 cycloaddition reactions homogeneously with rare-earth compounds is an emerging approach. The reaction efficiency can be understood by mechanism study. In this work, we report a detailed density functional theory investigation on a well-designed experimental Sm catalyst. We calibrate the ωB97XD exchange–correlation functional as the best candidate functional for this specific catalytic system. The energetic span of catalytic cycle is approximately 25 kcal mol−1. The rate-determining transition state is the one for ring-closure to generate the product. Two competing paths are revealed. Through both ionic and covalent metal–ligand interactions, the lowering of the epoxide substrate ring-opening step barrier is significant compared with the Sm compound free case. This work demonstrate the values for utilizing modern density functional theory to complement the understandings on the homogeneous rare-earth catalytic processes.