Ar matrix photolysis of 1- and 2-naphthyl azides 3 and 4 at 313 nm initially affords the singlet naphthyl nitrenes, (1)1 and (1)2. Relaxation to the corresponding lower energy, persistent triplet nitrenes (3)1 and (3)2 competes with cyclization to the azirines 15 and 18, which can also be formed photochemically from the triplet nitrenes. On prolonged irradiation, the azirines can be converted to the seven-membered cyclic ketenimines 10 and 13, respectively, as described earlier by Dunkin and Thomson. However, instead of the o-quinoid ketenimines 16 and 19, which are the expected primary ring-opening products of azirines 15 and 18, respectively, we observed their novel bond-shift isomers 17 and 20, which may be formally regarded as cyclic nitrile ylides. The existence of such ylidic heterocumulenes has been predicted previously, but this work provides the first experimental observation of such species. The factors which are responsible for the special stability of the ylidic species 17 and 20 are discussed.