The ground and excited states of Ni(CO)4 are studied using the symmetry adapted cluster (SAC)/SAC-configuration interaction (SAC-CI) method. The experimental absorption spectrum is well reproduced by the present calculations. All the peaks observed in the range of 200 similar to 350 nm are assigned to the electronic allowed T-1(2) excited states. The third peak is assigned to the 3(1)T(2) and 4(1)T(2) states. Next, the potential energy curves of the ground and die low-lying excited states are calculated by the same method and utilized to clarify the mechanism of the photofragmentation reaction of Ni(CO)(4) by a XeCl laser (308 nm). A reaction pathway involving several excited states is proposed for the photofragmentation reaction into the excited Ni(CO)3 and CO. The calculated emission energy from the former agrees well with the observed luminescence spectrum.