Xanthorhodopsin of the extremely halophilic bacterium Salinibacter ruber represents a novel antenna system. It consists of a carbonyl carotenoid, salinixanthin, bound to a retinal protein that serves as a light-driven transmembrane proton pump similar to bacteriorhodopsin of archaea. Here we apply the femtosecond transient absorption technique to reveal the excited-state dynamics of salinixanthin both in solution and in xanthorhodopsin. The results not only disclose extremely fast energy transfer rates and pathways, they also reveal effects of the binding site on the excited-state properties of the carotenoid. We compared the excited-state dynamics of salinixanthin in xanthorhodopsin and in NaBH(4)-treated xanthorhodopsin. The NaBH(4) treatment prevents energy transfer without perturbing the carotenoid binding site, and allows observation of changes in salinixanthin excited-state dynamics related to specific binding. The S(1) lifetimes of salinixanthin in untreated and NaBH(4)-treated xanthorhodopsin were identical (3 ps), confirming the absence of the S(1)-mediated energy transfer. The kinetics of salinixanthin S(2) decay probed in the near-infrared region demonstrated a change of the S(2) lifetime from 66 fs in untreated xanthorhodopsin to 110 fs in the NaBH(4)-treated protein. This corresponds to a salinixanthin-retinal energy transfer time of 165 fs and an efficiency of 40%. In addition, binding of salinixanthin to xanthorhodopsin increases the population of the S(*) state that decays in 6 ps predominantly to the ground state, but a small fraction (<10%) of the S(*) state generates a triplet state.