We have shown that the fundamental step responsible for enantioinduction in the inner-sphere asymmetric Tsuji allylic alkylation is C-C bond formation through a seven-membered pericyclic transition state. We employ an extensive series of quantum mechanics (QM) calculations to delineate how the electronic structure of the Pd-catalyzed C-C bond forming process controls the reaction. Phase inversion introduced by d orbitals renders the Pd-catalyzed [π2s + π2s + σ2s + σ2s] reaction symmetry-allowed in the ground state, proceeding through a transition state with Craig-Möbius-like σ-aromaticity. Lastly, we connect QM to fundamental valence bonding concepts by deriving an ab initio "arrow-pushing" mechanism that describes the flow of electron density through the reaction.