The mechanisms of C−C activation of 1-Benzylcyclopropan-1-ol to produce 1,6-diketone have been investigated by density functional theory (DFT) calculations. The catalyst [Cp*RhCl2]2 and additive Ag2CO3 play an important role in controlling the selectivity. By employing [Cp*RhCl2]2 as catalyst and Ag2CO3 as additive, the product is 1,6-diketone, whereas the β-hydride elimination product could not be obtained. The product would become monoketone in the absence of [Cp*RhCl2]2. In addition, the combination of catalyst [Cp*RhCl2]2 and additive AgOAc would also lead to monoketone. The observed selectivity could be attributed to the electronic effect.