The mechanism of cyclopropanations with diazirines as air-stable and user-friendly alternatives to commonly employed diazo compounds within iron heme enzyme-catalyzed carbene transfer reactions has been studied by means of density functional theory (DFT) calculations of model systems, quantum mechanics/molecular mechanics (QM/MM) calculations, and molecular dynamics (MD) simulations of the iron carbene and the cyclopropanation transition state in the enzyme active site. The reaction is initiated by a direct diazirine-diazo isomerization occurring in the active site of the enzyme. In contrast, an isomerization mechanism proceeding via the formation of a free carbene intermediate in lieu of a direct, one-step isomerization process was observed for model systems. Subsequent reaction with benzyl acrylate takes place through stepwise C-C bond formation via a diradical intermediate, delivering the cyclopropane product. The origin of the observed diastereo- and enantioselectivity in the enzyme was investigated through MD simulations, which indicate a preferred formation of the cis-cyclopropane by steric control.