Density functional theory with hybrid B3LYP exchange and correlation functional has been used to investigate the first two catalytic reactions, the oxidative addition and migratory 1,1-insertion of the Monsanto and Cativa processes. One of the main interests has been to study if the previously unidentified trans forms of the active catalytic species [Rh(CO)2I2]- (1) or [Ir(CO)2I2]- (2) have any significance in these processes. The oxidative addition has been studied using both cis and trans forms of 1 and 2. We have also studied the oxidative addition of methyl iodide to [Rh(CO)2I3]2- (3). In addition, different isomers of dicarbonyls [CH3Rh(CO)2I3]- (4) and [CH3Ir(CO)2I3]- (5) and tricarbonyl [CH3Ir(CO)3I2] (8) has been used in the 1,1-insertion study to see if these could provide new, alternative reaction pathways. The calculated free energies of activation for the oxidative addition of methyl iodide to cis-1 and cis-2 are 20.8 and 16.9 kcal/mol, respectively. The corresponding free energy barriers for trans-1 and trans-2 are 15.0 and 13.2 kcal/mol, respectively. The oxidative addition is the rate-determining step in the Monsanto process and the reaction with trans-1 is predicted to accelerate that step. The presence of 3 could enhance the addition even more; the free energy of activation is only 5.6 kcal/mol. For the 1,1-insertions we have found similar activation energies in fac,cis- and mer,trans-structures. In the rhodium system, the free energies of activation are in the order of 20 kcal/mol and in the iridium system 30 kcal/mol. Interestingly, the insertions in mer, cis-dicarbonyls have considerably lower activation energies, half of those calculated for the insertions in mer,trans- and fac,cis-structures. The iodide dissociation from fac,cis-5 could provide the path to mer,cis-5 and so significantly enhance the rate of the insertion in the iridium system. The rate of the insertion should also increase if experimentally proposed tricarbonyl 8 is used instead of 5. According to our calculations of different isomers of 8, this seem to be true although the insertion barrier in mer,cis-5 is calculated to be even lower. Our results are consistent with the experiments and other computational results. These results show that the geometrical arrangement of the ligands has a very large effect on the catalytic activity of the complexes and this suggests possible improvements to these industrially important processes.