The mechanism of the C6H5 + C2H2 reaction has been investigated by various quantum chemical methods. Electrophilic addition to the CC triple bond is found to be the only important mode of phenyl radical attack on acetylene. The initially formed chemically activated C6H5C2H2 adducts may follow several isomerization pathways in competition with collisional stabilization and H-elimination. Thermochemistry of various decomposition and isomerization channels is evaluated by the G2M method. For key intermediates, the following standard enthalpies of formation have been deduced from isodesmic reactions: 94.2 +/- 2.0 kcal/mol (C6H5CHCH), 86.4 +/- 2.0 kcal/mol (C6H5CCH2), and 95.5 +/- 1.8 kcal/ mol (O-C6H4C2H3). The accuracy of theoretical predictions was examined through extensive comparisons with available experimental and theoretical data. The kinetics and product branching of the C6H5 + C2H2 reaction have been evaluated by weak collision master equation/Rice-Ramsperger-Kassel-Marcus (RRKM) analysis of the truncated kinetic model including only kinetically important transformations of the isomeric C8H7 radicals. Available experimental kinetic data can be quantitatively reproduced by calculation with a minor adjustment of the C6H5 addition barrier from 3.7 to 4.1 kcal/mol. Our predicted total rate constant, k(R1) = (1.29 x 10(10)) T-0.834 exp(-2320/T) cm(3) mol(-1) s(-1), is weakly dependent on P and corresponds to the phenylation process under combustion conditions (T > 1000 K).