A detailed mechanistic investigation of epoxide carbonylation by the catalyst [(salph)Al(THF)(2)](+) [Co(CO)(4)](-) (1, salph = N,N'-o-phenylenebis(3,5-di-tert-butylsalicylideneimine), THF = tetrahydrofuran) is reported. When the carbonylation of 1,2-epoxybutane (EB) to beta-valerolactone is performed in 1,2-dimethoxyethane solution, the reaction rate is independent of the epoxide concentration and the carbon monoxide pressure but first order in 1. The rate of lactone formation varies considerably in different solvents and depends primarily on the coordinating ability of the solvent. In mixtures of THF and cis/trans-2,5-dimethyltetrahydrofuran, the reaction is first order in THF. From spectroscopic and kinetic data, the catalyst resting state was assigned to be the neutral (beta-aluminoxy) acylcobalt species (salph)AlOCH(Et)CH2COCo(CO)(4) (3a), which was successfully trapped with isocyanates. As the formation of 3a from EB, CO, and 1 is rapid, lactone ring closing is rate-determining. The favorable impact of donating solvents was attributed to the necessity of stabilizing the aluminum cation formed upon generation of the lactone.