The Pd(ii)-catalyzed site-selective δ-C(sp3)-H alkenylation in the presence of more accessible γ-C(sp3)-H bonds is investigated by DFT calculations. Migratory insertion is found to be both the rate-limiting and the selectivity-determining step. The origin of the unusual site-selectivity is originally attributed to the different steric repulsion between the alkyne and palladacycle; however, our theoretical results reveal that the inherent electronic effect instead of steric repulsion determines the site-selectivity. The proposal is further validated by model calculations involving the less sterically hindered 1,2-dimethyl acetylene and acetylene. In addition, a novel HCO3--assisted N-H activation mechanism is reported, and the origin of the regioselectivity of an unsymmetrical alkyne is also studied.