The electronic structures of phenylacetylene (PA) in S-0, S-1, and S-2 have been examined by means of ab initio complete active space self-consistent field (CASSCF) and the second-order multi-reference Moller-Plesset (MRMP2) calculations. The stable structures of PA in both So and S, are optimized to be C-2v. The stable structure in S-1 is characterized as an enlarged benzene ring, which is caused by local pi-pi excitation within the benzene ring. On the other hand, the S-2 geometry is optimized to be a quinoid structure where the aromaticity of the benzene ring is completely lost. To discuss the internal conversion from S-2 into S-1, the conical intersection between S-2 and S-1 (S-2/S-1-CIX) has been also determined. The S-2/S-1-CIX is characterized as a quinoid structure in the benzene part and allene-like in the acetylene part. The present computational result well reproduces the experimental findings, such as the rotational constant and the feature of the absorption spectrum.