The polymerization mechanism of para-methoxystyrene catalyzed by cationic α-diimine palladium complexes with various ancillary ligands was rigorously examined using density functional theory. In the classical methyl-based α-diimine palladium complex [{(2,6-iPr2C6H3)-N=C(Me)-C(Me)=N-2,6-iPr2C6H3)}PdMe]+ (A+), the 2,1-insertion of para-methoxystyrene is favored over the 1,2-insertion, both thermodynamically and kinetically, during the chain initiation step. The resulting thermodynamically favored η3-π-benzyl intermediates face a substantial energy barrier, yielding only trace amounts of polymer, as experimentally verified. In contrast, the dibenzobarrelene-based α-diimine palladium complex [{(2,6-iPr2C6H3)-N=C(R)-C(R)=N-2,6-iPr2C6H3)}PdMe]+ (R = dibenzobarrelene, B+) shows similar energy barriers for both 2,1- and 1,2-insertions. Continuous 2,1/2,1 or 2,1/1,2 insertions are impeded by excessive energy barriers. However, theoretical calculations reveal that the 1,2-insertion product can seamlessly transition into the chain propagation stage, producing a polymer with high 1,2-regioselectivity. The observed activity of complexes A+ or B+ towards para-methoxystyrene polymerization stems from the energy barrier differences between the 1,2- and 2,1-insertions, influenced by the steric hindrance from the ancillary ligands. Further investigation into the effects of steric hindrance on the chain initiation stage involved computational modeling of analogous complexes with increased steric bulk. These studies established a direct correlation between the energy barrier difference ∆∆G (1,2−2,1) and the van der Waals volume of the ancillary ligand. Larger van der Waals volumes correspond to reduced energy barrier differences, thus enhancing the regioselectivity for para-methoxystyrene polymerization. Moreover, the experimental inertness of complex B+ towards styrene polymerization is attributed to the formation of stable kinetic and thermodynamic 2,1-insertion intermediates, which obstruct further styrene monomer insertion due to an extremely high reactive energy barrier. These findings contribute to a deeper understanding of the mechanistic aspects and offer insights for designing new transition metal catalysts for the polymerization of para-alkoxystyrenes.