Since Akiyama and Terada independently reported the introduction of chiral phosphoric acids (CPAs) as effective catalysts for Mannich-type reactions in 2004, the field of CPA catalysis has grown immensely. Terada reported in 2008 the first example of the activation of aldehydes by a CPA. Based on density functional theory (DFT) calculations, Terada proposed a dual activation mode for this enantioselective aza–ene-type reaction between an aldehyde and an enecarbamate. In this model, hydrogen bonds between the catalyst’s hydroxyl group and the carbonyl oxygen and the catalyst’s P═O and the formyl proton were observed; the nucleophile then attacks without coordination to the catalyst. This reaction model provided the mechanistic basis for understanding Terada’s reaction and many other asymmetric transformations. In the present study, DFT calculations are reported that identify a lower-energy mechanism for this landmark reaction. In this new model, hydrogen bonds between the catalyst’s hydroxyl group and the aldehyde oxygen and the catalyst’s P═O and the NH group of the enecarbamate are seen. The new model rationalizes the stereoselective outcome of Terada’s reaction and offers insight into why a more sterically demanding catalyst gives lower levels of enantioselectivity.