The p-hydroxyphenacyl group 1 is an effective photoremovable protecting group, because it undergoes an unusual photo-Favorskii rearrangement concomitant with the fast release (<1 ns) of its substrates in aqueous solution. The reaction mechanism of the diethyl phosphate derivative 1 a was studied by picosecond pump-probe spectroscopy, nanosecond laser flash photolysis, and step-scan FTIR techniques. The primary photoproduct is a triplet biradical, 33, with a lifetime of about 0.6 ns. The release of diethyl phosphate determines the lifetime of the triplet state T-1(1a), tau(T-1) = 60 ps in wholly aqueous solution. Formation of a new photoproduct, p-hydroxybenzyl alcohol (6), was observed at moderate water concentrations in acetonitrile. It is formed by CO elimination from the elusive spirodione intermediate (4), followed by hydration of the resulting p-quinone methide (5). Computational studies show that CO elimination from the spirodione is a very facile process.