Neutral ketene is a crucial intermediate during zeolite carbonylation reactions. In this work, the roles of ketene and its derivates (viz., acylium ion and surface acetyl) associated with direct C-C bond coupling during the carbonylation reaction have been theoretically investigated under realistic reaction conditions and further validated by synchrotron radiation X-ray diffraction (SR-XRD) and Fourier transformed infrared (FT-IR) studies. It has been demonstrated that the zeolite confinement effect has significant influence on the formation, stability, and further transformation of ketene. Thus, the evolution and the role of reactive and inhibitive intermediates depend strongly on the framework structure and pore architecture of the zeolite catalysts. Inside side pockets of mordenite (MOR), rapid protonation of ketene occurs to form a metastable acylium ion exclusively, which is favorable toward methyl acetate (MA) and acetic acid (AcOH) formation. By contrast, in 12MR channels of MOR, a relatively longer lifetime was observed for ketene, which tends to accelerate deactivation of zeolite due to coke formation by the dimerization of ketene and further dissociation to diene and alkyne. Thus, we resolve, for the first time, a long-standing debate regarding the genuine role of ketene in zeolite catalysis. It is a paradigm to demonstrate the confinement effect on the formation, fate, and catalytic consequence of the active intermediates in zeolite catalysis.