Some of the key steps in the alkane carbonylation processes developed by Sakakura and Tanaka have been modeled by density functional theory. The catalytic carbonylation cycle involves photochemical activation of the precursor compound Rh(PR(3))(2)Cl(CO) (I),resulting in the 14-electron species Rh(PR(3))(2)Cl (2), which activates the C-H bond of hydrocarbons. The model precursor compound Rh(PH3)(2)Cl(CO) has a ground state structure with the phosphine ligands in a trans position, whereas 2 for R = H prefers a cis arrangement of the phosphines (cis-2a) and has a closed shell singlet ground state. The model species 2 with R = H adds a C-H methane bond to produce Rh(PH3)(2)Cl(H)(CH3) (5), after the formation of the eta(2)-methane complex Rh(PH3)(2)Cl(eta(2)-CH4) (3) The trans conformation trans-2a of Rh(PH3)(2)Cl is more reactive toward the C-H methane bond than cis-2a and forms a stronger eta(2)-methane complex. The-activation product Rh(PH3)(2)Cl(H)(CH3) (5) reacts with another CO to form Rh(PH3)(2)Cl(H)(CH3)(CO) (6), which can either eliminate methane to form 1 or undergo further transformation to eventually form acetaldehyde and 1. The elimination of methane is relatively facile with kinetic barriers of 72 kJ/mol (trans) and 57 kJ/mol (cis), respectively. In addition, the elimination reactions are exothermic-by respectively 112 kJ/mol (trans) and 125 kJ/mol (cis). It is thus clear that alkane elimination seriously can impede the carbonylation ;cycle. The catalytic activity can also be reduced by dimerization of Rh(PH3)(2)Cl. The present investigation combines "static" calculations of the stationary points on the potential surface with first principles molecular dynamics calculations based on the Car-Parrinello-Projector-Augmented-Wave method.