The polymerization of dimethylketene catalyzed by sodium methoxide yields a polyester which decomposes on heating to the@-lactone dimer of dimethylketene. Mechanisms for formation and pyrolysis of the polyester are offered. The 8-lactone dimer can also be prepared by the aluminum chloride-catalyzed dimerization of dimethylketene or rearrangement of the normal dimer, tetramethyl-l, 3-cyclobutanedione.