The mechanism and origin of ligand effects on stereoinversion of Pd-catalyzed synthesis of tetrasubstituted olefins were investigated using DFT calculations and the approach of energy decomposition analysis (EDA). The results reveal that the stereoselectivity-determining steps are different when employing different phosphine ligands. This is mainly due to the steric properties of ligands. With the bulkier Xantphos ligand, the syn/anti-to-Pd 1,2-migrations determine the stereoselectivity. While using the less hindered P(o-tol)3 ligand, the 1,3-migration is the stereoselectivity-determining step. The EDA results demonstrate that Pauli repulsion and polarization are the dominant factors for controlling the stereochemistry in 1,2- and 1,3-migrations, respectively. The origins of differences of Pauli repulsion and polarization between the two stereoselective transition states are further identified.