Density functional theory calculations have been employed to model phosphine substitution in Ru(PPh3)3(CO)(H)2 to form Ru(IMes)(PPh3)2(CO)(H)2 (1mono) and Ru(IMeS)2(PPh3)(CO)(H)2 (1bis), as well as the novel C(aryl)-C(sp3) intramolecular bond activation of the IMes ligand in 1bis. The computed ligand exchange energies show that 1bis, is unstable with respect to displacement of IMes by PPh3 and will thus re-form 1mono over time. PPh 3/IMes substitution also leads to a significant labilization of the PPh3 ligand trans to hydride, a result of increasing steric encumbrance upon the introduction of the bulky IMes ligands. The energetics of intramolecular C-C and C-H activation have been computed for both 16e Ru(IMes)n(PPh3)3-n(CO) and 14e Ru(IMes) n(PPh3)2-n(CO) species (n = 1 or 2) and indicate that the introduction of a second IMes ligand does not significantly promote the actual C-C activation step. Instead the need to have two IMes ligands present in the metal coordination sphere before C-C activation can occur is linked to the promotion of PPh3 loss in 1bis, which makes the formation of unsaturated species such as Ru(IMeS)2(CO) particularly accessible. © 2008 American Chemical Society.