Diketene (C4H4O2) monomers were isolated in cryogenic Ar (15 K) and Xe (30 K) matrices. The infrared (IR) spectra of the freshly deposited matrices show that diketene monomers exclusively adopt the 4-methylene-oxetan-2-one form. In situ photochemical transformations of diketene were induced by tunable UV laser light. Diketene was found to be photostable when exposed to near-UV irradiations (lambda > 300 nm). Irradiations in the middle-UV domain showed different types of photochemical reactivity occurring upon irradiations with 280 > lambda > 240 nm and lambda = 225 nm. The photoproducts were characterized by IR spectroscopy supported by B3LYP/6-311++G(d,p) calculations. Upon irradiation in the 280 > lambda > 225 nm range, diketene was found to decompose in two ways: (i) with production of two parent ketene molecules (O=C=CH2), and (ii) with production of cyclopropanone (CP) plus carbon monoxide. For irradiations in the 280 > lambda > 240 nm range, diketene exhibited two additional reactions: (iii) decomposition to allene (H2C=C=CH2) and carbon dioxide, and (iv) isomerization into cyclobutane-1,3-dione (CB). Of the above photoproducts, CP and CB were consumed by the same UV irradiations that resulted in their generation. Positive spectroscopic identification of CP and CB turned out to be possible with near-UV irradiations: CP decomposes to ethylene and carbon monoxide upon irradiation with lambda = 345 nm; CB decomposes exclusively to two parent ketene molecules, without isomerization back to diketene or decarbonylation, upon irradiation with lambda = 330 nm. Natural bond orbital (NBO) analysis showed that the two lowest excited singlet states of diketene are almost degenerate in energy and correspond to pi* orbitals of C=C and C=O moieties. The NBO calculations helped to establish that the third excited singlet state, in terms of energy, has sigma*(3s) Rydberg character, in accord with the literature.