The rearrangement of phenylcarbene (1) to 1,2,4,6-cycloheptatetraene (3) has been studied theoretically, using SCF, CASSCF, CASPT2N, DFT (B3LYP), CISD, CCSD, and CCSD(T) methods in conjunction with the 6-31G, 6-311+G, 6-311G(2d,p), cc-pVDZ, and DZd basis sets. Stationary points were characterized by vibrational frequency analyses at CASSCF(8,8)/6-31G and B3LYP/6-31G. Phenylcarbene (1) has a triplet ground state ((3)A") with a singlet-triplet separation (DeltaE(ST)) of 3-5 kcal mol(-)(1). In agreement with experiment, chiral 3 is the lowest lying structure on this part of the C(7)H(6) potential energy surface. Bicyclo[4.1.0]hepta-2,4,6-triene (2) is an intermediate in the rearrangement of 1 into 3, but it is unlikely to be observable experimentally due to a barrier height of only 1-2 kcal mol(-)(1). The enantiomers of 3 interconvert via the (1)A(2) state of cycloheptatrienylidene (4) with an activation energy of 20 kcal mol(-)(1). The "aromatic" (1)A(1) state, previously believed to be the lowest singlet state of 4, is roughly 10 kcal mol(-)(1) higher in energy than the (1)A(2) state, and, in violation of Hund's rule, (3)A(2) is also calculated to lie above (1)A(2) in energy. Thus, even if (3)A(2) were populated, it is likely to undergo rapid intersystem crossing to (1)A(2). We suggest (3)B(1)-4 is the metastable triplet observed by EPR.