Kinetic studies of the reactions of [M(CO)(L-L)I] [M = Rh, Ir; L-L = Ph(2)PCH(2)P(S)Ph(2) (dppms), Ph(2)PCH(2)CH(2)PPh(2) (dppe), and Ph(2)PCH(2)P(O)Ph(2) (dppmo)] with methyl iodide have been undertaken. All the chelate ligands promote oxidative addition of methyl iodide to the square planar M(I) centers, by factors of between 30 and 50 compared to the respective [M(CO)(2)I(2)](-) complexes, due to their good donor properties. Migratory CO insertion in [Rh(CO)(L-L)I(2)Me] leads to acetyl complexes [Rh(L-L)I(2)(COMe)] for which X-ray crystal structures were obtained for L-L = dppms (3a) and dppe (3b). Against the expectations of simple bonding arguments, methyl migration is faster by a factor of ca. 1500 for [Rh(CO)(dppms)I(2)Me] (2a) than for [Rh(CO)(dppe)I(2)Me] (2b). For M = Ir, alkyl iodide oxidative addition gives stable alkyl complexes [Ir(CO)(L-L)I(2)R]. Migratory insertion (induced at high temperature by CO pressure) was faster for [Ir(CO)(dppms)I(2)Me] (5a) than for its dppe analogue (5b). Reaction of methyl triflate with [Ir(CO)(dppms)I] (4a) yielded the dimer [[Ir(CO)(dppms)(mu-I)Me](2)](2+) (7), which was characterized crystallographically along with 5a and [Ir(CO)(dppms)I(2)Et] (6). Analysis of the X-ray crystal structures showed that the dppms ligand adopts a conformation which creates a sterically crowded pocket around the alkyl ligands of 5a, 6, and 7. It is proposed that this steric strain can be relieved by migratory insertion, to give a five-coordinate acetyl product in which the sterically crowded quadrants flank a vacant coordination site, exemplified by the crystal structure of 3a. Conformational analysis indicates similarity between M(dppms) and M(2)(mu-dppm) chelate structures, which have less flexibility than M(dppe) systems and therefore generate greater steric strain with the "axial" ligands in octahedral complexes. Ab initio calculations suggest an additional electronic contribution to the migratory insertion barrier, whereby a sulfur atom trans to CO stabilizes the transition state compared to systems with phosphorus trans to CO. The results represent a rare example of the quantification of ligand effects on individual steps from catalytic cycles, and are discussed in the context of catalytic methanol carbonylation. Implications for other catalytic reactions utilizing chelating diphosphines (e.g., CO/alkene copolymerization and alkene hydroformylation) are considered.