The photochemistry of Diazo Meldrum's acid (DM) was investigated by fs time-resolved UV-vis and IR spectroscopic methods. UV (266 nm) excitation of DM pumps the molecule to the S-5 and S-7 excited states. After fast internal conversion (IC), the S-2 state is formed, which will undergo Wolff rearrangement to form vibrationally excited ketene, which relaxes in 9 ps. The S-2 state will also relax to the S-1 state, which isomerizes to diazirine, fragments to form carbene, and relaxes further to the ground state of DM. The singlet carbene absorbs at 305 nm, is formed within 300 fs of the laser pulse, and has a lifetime of 2.3 ps in acetonitrile. The lifetime of DM in the S-2 and S-1 states is less than 300 fs. The quantum efficiency of DM decomposition is similar to 50% in chloroform with 266 nm excitation.