An extensive density functional theory (DFT, M05-2X) investigation has been performed on the zinc carbenoid-mediated homologation reaction of β-keto esters. The mechanistic existence of a classical donor-acceptor cyclopropane intermediate was probed to test the traditional school of thought regarding these systems. Calculations of the carbenoid insertion step, following enolate formation, unmasked two possible pathways. Pathway B was shown to explain the proposed, but spectroscopically unobservable donor-acceptor cyclopropane intermediate, while the second (pathway A) reveals an alternative to the classical intermediate in that a cyclopropane transition state leads to product.