Density functional calculations have been carried out on the thermochemical aspects of catalytic ethylene dimerization by the d8 hydride (propanedial(-))Ni-H (I), where the propanedial anion served as a model for the chelate acac ligand, acetylacetonate(-). The hydride (I) was found to have a low-spin d8 configuration with a square planar structure where one site is vacated cis to hydrogen. It was shown that ethylene inserts readily into the Ni-H bond of (I) with an exothermicity of 44.6 kcal/mol. The resulting ethyl complex (III) has a strong agostic interaction between nickel and a b-hydrogen. It is suggested that the ethyl complex is the actual catalyst in the dimerization cycle. The agostic interaction in (III) is estimated to have a strength of 10 kcal/mol. The next insertion of ethylene into the Ni-ethyl bond of (III) leads to the butyl complex (IV). The insertion is exothermic by 25 kcal/mol. The reaction between (IV) and ethylene leads finally to the release of 1-butene and the regeneration of the ethyl complex (III). This step is nearly thermoneutral with a reaction heat of .1 kcal/mol. It is suggested that the elimination of 1-butene takes place via a transition state in which both ethylene and 1-butene are p-complexed to (I). The internal barrier of activation for the final step is calculated to be 17 kcal/mol. The substitution of hydrogen by CH3 or CF3 groups on the propanedial(-) ligand were also considered. It was found that such substitutions only had a minor effect on the thermochemistry of the insertion processes in the dimerization cycle.