In this work, the ethylene coordination and dimerization mechanism over Cr(II)OH+ cation were systematically investigated using density functional theory (DFT) and complete active space second-order perturbation theory (CASPT2). It was found that Cr(II)OH+ cation can coordinate with up to four ethylene molecules which gives seven possible stable Cr(II)OH+center dot(C2H4)(n) (n = 1-4) pi-complexes. We investigated whether ethylene dimerization over Cr(II)OH+ cation proceeds through either a carbene mechanism or a metallacycle mechanism. The potential energy surfaces were characterized using four different functionals (M06L, BLYP, B3LYP, and M06). It was found that the potential energy profiles calculated at the M06 level agreed well with the CASPT2 energy profiles. Since the intermediates involved in the proposed catalytic cycles showed different ground spin states, a reaction pathway involving a spin crossing between two potential energy surfaces was observed. The minimum-energy crossing points (MECPs) that connect the two potential energy surfaces were successfully located. The two-state metallacycle reaction pathway with the formation of chromacyclopentane as the rate-determining step was found to be energetically more favorable than the carbene reaction pathway. 1-Butene was formed from the chromacyclopentane by a two-step reductive elimination pathway through a chromium(IV) hydride intermediate.