Six-membered ring dicarboxyimides undergo unusual ring contraction followed by the decarboxylation reaction under mild basic conditions to produce lactamimides. In all cases only one imide ring is transformed leaving the second one unchanged. This reaction was studied theoretically, and was modified and adopted to the synthesis of polylactamimide- containing polymers. First, polylactamimides were synthesized by three different methods: 1. Polycondensation of lactamimide-containing monomers, 2. Bisimide-lactam ring contraction of six-membered polyimides and 3. Polymerization of lactamimide containing macrocycles to produce amorphous polymers with strong luminescence (quantum yield>80%) and large Stokes shifts due to the intramolecular charge transfer from lactam to imide. All-aromatic polylactamimides exhibited T₁₀ up to 510°C and third order non-linear optical susceptibility up to 10^-10 e.s.u.