Photolysis of p-tolyldiazirine (6) in the inner phase of a hemicarcerand with four butane-1,4dioxy linker groups (5) in C6D5CD3 at 77 K yields the 5-methylcycloheptatetraene hemicarceplex 5circle dot3b in 41% together with innermolecular reaction products resulting from an insertion of transient p-tolylcarbene (1b) into an acetal C-H or linker C-O bond of 5 and from the addition of 1b to an aryl unit of 5. The yield of incarcerated 3b increased up to 67% if 6 is photolyzed inside a hemicarcerand with deuterated spanners and butane-1,4-dioxy linker groups (d(48)-5). Hemicarceplex 5circle dot3b is not formed if the photolysis is carried out in CDCl3. Incarcerated 3b is stable at room temperature in the absence of oxygen and is characterized by 1D and 2D NMR spectroscopy. In the presence of oxygen, 3b reacts quantitatively to yield toluene and CO2. Upon heating solutions of d(48)-5circle dot3b in C6D5CD3, 3b rearranges to 1b and m-tolylcarbene (18). Both tolylcarbenes immediately react with the surrounding host. From a product analysis and the measured rate constants for the thermal decomposition of d(48)-5circle dot3b in the temperature range 70-102 degreesC, the activation parameters for the 3b to 1b and 3b to 18 rearrangements are calculated (3b to 1 b: DeltaG(373)(double dagger) 27.3 +/- 1.4 kcal/mol, DeltaH(373)(double dagger) = 26.4 +/- 1.0 kcal/mol, TDeltaS(373)(double dagger) = -0.9 +/- 1.0 kcal/mol; 3b to 18: AG(373)(double dagger) 27.8 +/- 1.4 kcal/mol, DeltaH(373)(double dagger) = 19.7 +/- 1.0 kcal/mol, TDeltaS(373)(double dagger) = 8.1 +/- 1.0 kcal/mol). These values are compared with those calculated by Geise and Hadad at the B3LYP/6-311+G** level of theory (Geise, C. M.; Hadad, C. M. J. Org. Chem. 2002, 67, 2532-2540). The slightly higher inner phase activation free energy of the 3b to 18 rearrangement is explained through steric constraints imposed by the surrounding hemicarcerand on the transition state. The enthalpy-entropy compensation observed for the 3b to 18 rearrangement is discussed and interpreted as a result of a hemicarcerand and solvent reorganization along the reaction coordinate. It is taken as indirect evidence for the intermediacy of 2-methylbicyclo[4.1.0]hepta-2,4,6-triene in the 3b to 18 rearrangement.