A readily available N,N'-diamidocarbene (DAC) was found to insert into the P-H bonds of primary and secondary phosphines as well as a phosphonate ester. In contrast, tertiary phosphines catalyzed the ring contraction of the DAC to an iminopyrrolidinedione. Treating the DAC with trimethyl phosphite afforded the corresponding diamidophosphonate ester and olefinic products expected from an Arbuzov-type reaction.