We have used experimental studies and DFT calculations to investigate the IrIII‐catalyzed isomerization of allylic alcohols into carbonyl compounds, and the regiospecific isomerization–chlorination of allylic alcohols into α‐chlorinated carbonyl compounds. The mechanism involves a hydride elimination followed by a migratory insertion step that may take place at Cβ but also at Cα with a small energy‐barrier difference of 1.8 kcal mol−1. After a protonation step, calculations show that the final tautomerization can take place both at the Ir center and outside the catalytic cycle. For the isomerization–chlorination reaction, calculations show that the chlorination step takes place outside the cycle with an energy barrier much lower than that for the tautomerization to yield the saturated ketone. All the energies in the proposed mechanism are plausible, and the cycle accounts for the experimental observations. Experimental and DFT calculations have been used to understand the mechanism of the IrIII‐catalyzed isomerization of allylic alcohols into carbonyl compounds, and the regiospecific isomerization–chlorination of allylic alcohols into α‐chlorinated carbonyl compounds. The results presented, point to the importance of using an experimental–computational approach to comprehend the mechanisms of complex reactions (see scheme).