The migratory insertion reaction of NO into the Co-CH3 sigma-bond in the cobalt cyclopentadienyl complex CpCo(NO)(CH3) (2), both with and without the assistance of an incoming ligand (PH3, 1), has been studied using ab initio molecular orbital and density functional theory (DFT) methods. The insertion without PH3 association (Mechanism I) occurs with an activation energy of 10-20 kcal/mol, and the intermediate, CpCoN(O)CH3 (3a), forms with an endothermicity of 8-17 kcal/mol at the DFT-B3LYP and coupled cluster with singles and doubles (CCSD) levels of theory. The overall reaction to the product, CpCoN(O)CH3(PH3) (5b), was exothermic by -10 to -16 kcal/mol depending on the level of theory. An alternative mechanism II which begins with PH3 association and NO bending is endothermic by 16-18 kcal/mol and is immediately followed by a NO insertion barrier of 1934 kcal/mol for an overall barrier of 35-52 kcal/mol. Therefore, Mechanism I is the favored pathway. This result is in very good agreement with the kinetic experiments of Weiner and Bergman. Charge density and Laplacian analysis at the RHF level and the MO analysis from extended Huckel calculations reveal that the Co center plays a dual, electron acceptor and donor, role in the migratory insertion for both Mechanisms I and II. For Mechanism I the better acceptor and donor character of the metal center results in a lower activation energy as it cycles from a d(8) (18e(-)) complex at 2 to a d(8) (16e(-)) intermediate at 3 and back to a d(8) (18e(-)) product at 5. In contrast, for Mechanism II the original sigma(Co-C) orbital must rise to high energy before it can transfer charge density to the d(xz) orbital of the product as it cycles from a d(8) (18e(-)) complex at 2 to a d(6) (18e(-)) intermediate (4) and back to a d(8) (18e(-)) complex at 5, a cycle which consequently requires a greater activation energy.