(Chemical Equation Presented) A computational B3LYP/6-31G(d,p) study of the formation of benzothiet-2-one (4) from benzothiophenedione (2) and its subsequent dimerization to 5 was performed. The proposed intermediate ketene 3 has no gas-phase barrier to ring closure to 4. Three transition structures for dimerization were located. The geometry of the lowest energy one (TS8a) has a geometry corresponding to a two atom + two atom, face-to-face addition of the two thiolactone moieties. The orbital interactions suggest that the reaction is pseudopericyclic.