Based upon new insights into the dynamics of propagation reactions, a theoretical justification of the penultimate model in free-radical copolymerization kinetics is proposed. It is suggested that the penultimate unit effect may contain a large steric contribution (a different penultimate unit may affect the frequency factor for propagation by a factor typically between 1 and 10) and that the effect on activation energies is generally small. This implies that the stabilization energy model, where only differences in activation energies play a significant role, is valid only under unusual circumstances. Furthermore, a possible explanation is given for the occurrence of both the implicit and explicit penultimate unit effects. It is shown that mainly systems in which there is a large difference in the sizes of the substituents of both monomers are expected to exhibit an explicit penultimate unit effect;. Finally, it is shown that neither a purely enthalpic effect, nor the steric effect proposed here, provides an adequate explanation why, experimentally, mainly radical reactivity ratios less than unity are found.