The intermolecular gold(I)-catalyzed reaction between aryl alkynes and alkenes leads to cyclobutenes by a [2+2] cycloaddition. However, 1,3-dienes are formed in the case of ortho-substituted aryl alkynes by a metathesis-type process. A comprehensive mechanism for the gold(I)-catalyzed reaction of alkynes with alkenes is proposed based on DFT calculations and by independently generating the key intermediate cyclopropyl gold(I) carbenes by retro-Bucher reaction.