This review focuses on photolytic reactions of diazo compounds, namely aryl-diazo alkanes and α-diazo carbonyl compounds, covering their synthetic applications such as Wolff rearrangement, 1,2-shift, X-H insertion, cyclopropanation, hydrogen abstraction and reaction with oxygen as well as physical organic studies, with special relevance to mechanistic considerations. Singlet-triplet gap studies and the solvent influence on the stability and reactivity of carbenes are also covered together in this review to provide a comprehensive interpretation of their reactivity. The mechanism of the synthetically important Wolff rearrangement, which remains to this day open to dicussion, is evaluated in terms of the role of the diazo framework. 1,2-Shift photoinduced reactions, on the other hand, present well established mechanisms due to recent studies that have demonstrated the importance of photoexcited diazo species. The cyclopropanation reaction mechanism, which is used to demonstrate the spin multiplicity nature of a free carbene, is also well established. Contrary to these latter cases, O-H insertion and C-H insertion reactions continue to lack defined mechanisms inspite of recent studies. The few examples of diazo compounds reactions with molecular oxygen and hydrogen abstraction present in the literature are also covered.