Local (LDF) and nonlocal (NLDF) density functional, Hartree-Fock (HF), and second-order Moller-Plesset perturbation (MP2) theories were used to study the fundamental reaction steps of Ziegler-Natta catalysis in the model TiCl2CH3+ system. This comprised a detailed theoretical characterization of the ethylene binding and insertion reactions : TiCl2CH3+ + C2H4 --> TiCl2CH3(C2H4)(+) and TiCl2CH3(C2H4)(+) --> TiCl2(C3H7)+. The geometries of all species in the two reactions were fully optimized at all levels of theory, and the energy changes for the two reactions were calculated at all levels of theory. The basis set superposition error associated with the ethylene binding reaction was assessed by the counterpoise method at all levels of theory. The results show that the extended theories (NLDF and MP2) predict geometries and energetics that are substantially different from their respective pared theories (LDF and HF). This is due primarily to ways in which nonbonded interactions are handled by each of these methods. The overall agreements between the calculated geometries and energetics predicted by NLDF and MP2 theories are good.