In this study we have investigated binding of the fluorescent hydrophobicity probe Nile Red to the photoactive yellow protein (PYP), to characterize the exposure and accessibility of hydrophobic surface upon formation of the signaling state of this photoreceptor protein. Binding of Nile Red, reflected by a large blue shift and increase in fluorescence quantum yield of the Nile Red emission, is observed exclusively when PYP resides in its signaling state. N-terminal truncation of the protein allows assignment of the region surrounding the chromophore as the site where Nile Red binds to PYP. We also observed a pH dependence of the affinity of Nile Red for pB, which we propose is caused by pH dependent differences of the structure of the signaling state. From a comparative analysis of the kinetics of Nile Red binding and transient absorption changes in the visible region we can conclude that protonation of the chromophore precedes the exposure of a hydrophobic surface near the chromophore binding site, upon formation of the signaling state. Furthermore, the data presented here favor the view that the signaling state is structurally heterogeneous.