We present an extensive theoretical study of the iron(II)-bisimine pyridine based ethylene-polymerization catalysts {[2,6-((R)N=C(R'))(2)-C5H3N]FeC3H7}(+) (R = R' = H, 1a; R = 2,6-C6H4(i-Pr)(2), R' = CH3, 1A) recently developed by the groups of Brookhart and Gibson. The study was based on density functional theory (DFT) for the "generic" model system la and a combined DFT and molecular mechanics approach for the "real" system 1A. It is shown that the rate-determining step for both termination and propagation in the "real" system is the capture of ethylene by 1A. The steric bulk introduced by R = 2,6-C6H4(i-Pr)(2) was found to suppress ethylene capture for the termination step and increase the rate of insertion. Termination takes place on the singlet potential energy surface (PES). For propagation the singlet and triplet PES's are close in energy and spin-state change is possible. The quintet states are too high in energy to play any role in polymerization. The model system la was found to form an ethylene complex that is too stable for any further chemical transformation to take place.