Synthesis of a sterically congested metallacyclobutene complex has led to the first observation of metallacyclobutene-η(3)-vinylcarbene equilibration. The structure of the η(3)-vinylcarbene complex was elucidated by spectroscopy, HRMS, and ab initio computations. The vinylcarbene complex was trapped by reactions with ethyl diazoacetate and (C5H5)Co(PPh3)2 to give cobalt-diene and dicobalt complexes, respectively.