Two competitive mechanistic pathways for the reaction between trimethyl phosphite and chloroacetone are analyzed by high-level calculations. FMO analysis and HSAB-derived descriptors point to a preferential initial interaction of the nucleophile with the carbonyl group as electrophile. The Perkow reaction starts by chelotropic addition of the P atom to the carbonyl C-O bond, which is the rate-determining step in THE or CH2Cl2 solution, yielding an oxaphosphirane intermediate. The oxaphosphirane undergoes sequential P-C bond cleavage with elimination of chloride ion and O-demethylation. The alternative Michaelis-Arbuzov reaction involves nucleophilic displacement of chloride by the P atom and subsequent O-demethylation. The Perkow path is kinetically and thermodynamically favored with respect to the Michaelis-Arbuzov path in the gas phase, but it is only kinetically preferred in polar (THE or CH2Cl2) solvent.