This paper describes the syntheses and reactivities of a series of IrCl(CO)(PR(3))(2)(eta(2)-3,3-diphenylcyclopropene) complexes (1, PR(3) = PMe(3); 2, PR(3) = PMe(2)Ph; 3, PR(3) = PMePh(2); 4, PR(3) = PEt(3)). NMR spectroscopic data for these complexes and a single crystal X-ray diffraction study of 1 support a trigonal bipyramidal structure where the PR(3) ligands and the olefin lie in the equatorial plane. The equilibrium between free and bound olefin was found to depend on the size of the tertiary phosphine : olefin coordination becomes less favorable as the cone angle of the tertiary phosphine increases. Lability of the olefin moiety was demonstrated by exchange of the olefin in 1 with deuterium-labeled 3,3-diphenylcyclopropene. In the presence of excess IrCl(CO)(PMe(3))(2), complex 1 rearranges. Spectroscopic data support the formation of an iridacyclobutene as part of a bimetallic complex where the iridacyclobutene moiety is stabilized by eta(2)-coordination to IrCl(CO)(PMe(3))(2) into the C-C sigma-bond of the cyclopropene moiety in 1. Kinetic measurements suggest that this reaction occurs by a second-order process, first order in both IrCl(CO)(PMe(3))(2) and 1. The mechanism of C-C bond insertion was further supported by isotopic-labeling experiments, which demonstrate that the metal in the metallacycle originates from free IrCl(CO)(PMe(3))(2).