The mechanism of ethylene trimerization and tetramerization with a chromium-diphosphinoamine (Cr-PNP) catalyst system has been studied by theoretical (DFT) methods. Two representative ligands have been explored, namely Ph2 PN(Me)PPh2 and (o-MeC6 H4 )2 PN(Me)P(o-MeC6 H4 )2 . Calculations on the former ligand reveal how a combination of single and double ethylene insertion mechanisms may lead to 1-hexene, 1-octene and the major side products (cyclopentanes and n-alkanes). For the latter ligand, introduction of o-alkyl substitution leads to a more sterically congested active species, which suppresses the available pathways for tetramerization and side product formation. Hence, the high selectivity of o-aryl substituted PNP ligands for trimerization can be rationalized.