The photochemical or thermal decomposition of ethyl diazomalonate (1) or ethyl 3,3-diazirinedicarboxylate in methanol solutions yields the O-H insertion product 6, while products of the Wolff rearrangement were not detected in both cases. The analysis of temperature-dependent C-13 NMR spectra and the results of DFT B3LYP/6-311+G(3df,2p) and MP2/aug-cc-pVTZ//B3LYP/6-311+G(3df,2p) calculations allow us to conclude that diazodiester 1 predominantly exists in the Z,Z-conformation. In contrast, photolysis of the cyclic isopropylidene diazomalonate (3), which also has a Z,Z-configuration of the diazodicarbonyl moiety, results in a clean Wolff rearrangement. These observations allow us to conclude that the direction of the photodecomposition of diazomalonates is not controlled by the ground-state conformation. The quantum-mechanical analysis of the potential energy surfaces for the dediazotization of 1 and 3 suggests that the formation of a carbene as a discrete intermediate is controlled by the ability of the latter to adopt a conformation in which carbonyl groups are almost orthogonal to the carbene plane. The outcome of the photolysis of ethyl diazomalonate depends on the wavelength of irradiation. Irradiation with 254 nm light results in the loss of nitrogen and the formation of dicarboethoxycarbene (5, Phi(254) = 0.31), while at longer wavelengths, diazirine 2 becomes an important byproduct (Phi(350) = 0.09). This observation suggests that the formation of carbene 5 and isomerization to diazirine proceed from different electronically excited states of ethyl diazomalonate.