Density functional calculations (B3LYP) on IrXH2(η2-H2)(PR3)2 for X = Cl, Br, I and R = H, Me and inelastic neutron scattering studies for X = Cl, Br, I and R = Pr(i) are used to elucidate the mechanisms for the intramolecular dihydrogen/hydride exchange. The two lowest energy processes are rotation of the dihydrogen ligand and oxidative addition of the dihydrogen to form an intermediate Ir(V) tetrahydride, which undergoes rapid reductive elimination to interchange the dihydrides and the dihydrogen. The use of PMe3 as a model phosphine is essential to bring the calculated barriers for the dihydrogen/hydride interchange into agreement with the experimental observations. The activation energy for site exchange (1.9 kcal/mol) is found to be in excellent agreement with the experimental result obtained for X = Cl (1.5(2) kcal/mol), and the calculations show a slight decrease in this value from X = Cl to I. Comparison between calculated rotational barriers (0.4 to 0.7 kcal/mol) and experimental values obtained for IrXH2(η2-H2)(PR3)2 (X = Cl, Br, I; R = Pr(i)) (0.5 to 1.0 kcal/mol) also demonstrates that the quantitative estimate of the barrier to rotation requires PMe3 as the minimal model ligand.