Excited-state potential energy surface (PES) characterization is carried out at the CASSCF and MRSDCI levels, followed by ab initio dynamics simulation of excited-state intramolecular proton transfer (ESIPT) on the S2(pipi*) state in malonaldehyde. The proton-transfer transition state lies close to an S2/S1 conical intersection, leading to substantial coupling of proton transfer with electronic relaxation. Proton exchange proceeds freely on S2, but its duration is limited by competition with twisting out of the molecular plane. This rotamerization pathway leads to an intersection of the three lowest singlet states, providing the first detailed report of ab initio dynamics around a three-state intersection (3SI). There is a significant energy barrier to ESIPT on S1, and further pyramidalization of the twisted structure leads to the minimal energy S1/S0 intersection and energetic terminal point of excited-state dynamics. Kinetics and additional mechanistic details of these pathways are discussed. Significant depletion of the spectroscopic state and recovery of the ground state is seen within the first 250 fs after photoexcitation.