Irradiation of beta-phenylethynyl-alpha-diazo-beta-ketoester with 300 or 350 nm light results in efficient and regioselective Wolff rearrangement producing only the product of alkynyl group migration. Addition of alcohols to the resulting alpha-oxoketene yields alpha-phenylethynyl-beta-diester, which undergoes rapid (T < 1 min) tautomerization to 1,1-dicarbalkoxyallene. The latter then adds second molecule of alcohol in Michael fashion to form the final product, 2-(1-alkoxy-2-phenylvinyl)malonic ester. alpha-Phenylethynyl-beta-ketoacid produced from the ketene in aqueous solutions does not isomerize to an allene but rather undergoes decarboxylation to give beta,gamma-acetylenic ester. Introduction of o-(3-hydroxy-1-propynyl) fragment in the structure of the parent alpha-diazo-beta-ketoester allowed us to achieve two goals simultaneously: ring closure by intramolecular nucleophilic attack of propargyl alcohol on photo-generated ketene and the subsequent acetylene-allene rearrangement. The resulting enyne-allene undergoes spontaneous Myers-Saito cycloaromatization generating 1,4-biradical. In alcohol solutions, however, ketene reaction with solvent outcompetes the intramolecular process. Copyright (C) 2011 John Wiley & Sons, Ltd.