A mechanistic study of palladium-catalyzed oxidative carbocyclization and borylation of allenes was carried out by using density functional theory (DFT) calculations. A subtle change in the reaction conditions can cause the reaction to produce either cyclobutene product or alkenylboron compound with high chemoselectivity. Acetic acid solvent gives the alkenylboron compound as the major product, while methanol solvent favors the formation of the cyclobuteneboron product. Our calculations account for the observed solvent-controlled chemoselectivity. Lowering the polarity of the solvent disfavors the olefin insertion step and the formation of cyclobuteneboron product.