Ab initio quantum mechanical methods have been used to study the dimerization of ketene to form diketene and 1,3-cylobutanedione. Molecular structures for reactants, products, and transition states of the above reactions have been determined at the self-consistent-field (SCF) level of theory with a double-zeta plus polarization (DZ+P) basis set. Relative energies of stationary points have been predicted at the single and double excitation configuration interaction (CISD) level of theory. At the DZ+P SCF level of theory, the formation of 1,3-cyclobutanedione is predicted to proceed through an unsymmetrical transition state and has a classical barrier height of 36 kcal/mol. The formation of diketene also proceeds through an unsymmetrical transition state and is predicted to have a barrier height of 32 kcal/mol. Inclusion of electron correlation and zero-point vibrational energy yields an estimate of 26 kcal/mol for the latter barrier. Neither transition state is consistent with the 2S + 2A cycloaddition reaction mechanism.