Asymmetric Simmons-Smith reaction using Charette chiral dioxaborolane ligand is a widely applied method for the construction of enantiomerically enriched cyclopropanes. The detailed mechanism and the origins of stereoselectivity of this important reaction were investigated using density functional theory (DFT) calculations. Our computational studies suggest that, in the traditional Simmons-Smith reaction conditions, the monomeric iodomethylzinc allyloxide generated in situ from the allylic alcohol and the zinc reagent has a strong tendency to form a dimer or a tetramer. The tetramer can easily undergo an intramolecular cyclopropanation to give the racemic cyclopropane product. However, when a stoichiometric amount of Charette chiral dioxaborolane ligand is employed, monomeric iodomethylzinc allyloxide is converted into an energetically more stable four-coordinated chiral zinc/ligand complex. The chiral complex has the zinc bonded to the CH(2)I group and coordinated by three oxygen atoms (one from the allylic alcohol and the other two oxygen atoms from the carbonyl oxygen and the ether oxygen in, the dioxaborolane ligand), and it can undergo the cyclopropanation reaction easily. Three key factors influencing the enantioselectivity have been identified through examining the cyclopropanation transition states: (1) the torsional strain along the forming C-C bond, (2) the 1,3-allylic strain caused by the chain conformation, and (3) the ring strain generated in the transition states. In addition, the origin of the high anti diastereoselectivity for the substituent on the zinc reagent and the hydroxymethyl group of the allylic alcohol has been rationalized through analyzing the steric repulsion and the ring strain in the cyclopropanation transition states.