Ab initio method, under the effective core potential(ECP) approximation at HF/LANL2DZ level, has been employed to study the reaction mechanism of the carbonyl insertion of olefin hydroformylation catalyzed by a carbonyl cobalt HCo(CO)3. The two reaction paths have been discussed. The calculated potential energy barriers for the carbonyl migration and the ethyl group migration are 105.0 kJ/mol and 39.17 kJ/mol, respectively. The results indicate that the reaction path via ethyl migration is more energetically favorable than that via carbonyl insertion.