The origin of unique catalytic activity of a thiolate-bridged diruthenium complex in nucleophilic substitution reactions of propargylic alcohols, which features a diruthenium-allenylidene complex as a key intermediate, was studied with the aid of density functional calculations (B3LYP). Comparison of mono- and diruthenium systems has shown that the rigid but reasonably flexible Ru-Ru core structure plays a critical role in the catalyst turnover step (i.e., dissociative ligand exchange of the product T-complex with the starting propargyl alcohol that goes through a coordinatively unsaturated Ru complex). In the diruthenium system, the energy loss due to coordinative unsaturation can be compensated by reinforcement of the Ru-Ru bond, while such an effect is unavailable in the monoruthenium counterpart. Weaker back-donation ability of the diruthenium complex is also advantageous for dissociation of the T-complex. Thus, ligand exchange takes place smoothly in the diruthenium system to regenerate the reactive species, while the monoruthenium reaction stops at a dead-end Ru product pi-complex. The present studies have also shown the important role of protic molecules (e.g., MeOH) that mediate smooth proton transfer in the propargyl alcohol-allenylidene transformation.