We report here our mechanistic study of the previously published nickel-catalyzed cyclopropanation reaction using lithiomethyltrimethylammonium triflate as methylene donor. The cyclopropane yield is highly dependent on the olefin substrate and correlates well with the binding affinity of the olefin to Ni(0) as established elsewhere. On the basis of this observation, we developed a simplified mechanistic model that can explain several odd observations we found in our initial report. Most importantly, a binding equilibrium between the olefin substrate and phosphine ligand appears to govern the ratio between product formation and unproductive ylide decomposition in a side reaction.