Using various spectroscopic techniques such as UV-visible spectroscopy, circular dichroism spectroscopy, NMR spectroscopy, small-angle X-ray scattering, transient grating, and transient absorption techniques, we investigated how cell-mimetic environments made by crowding influence the photocycle of photoactive yellow protein (PYP) in terms of the molecular volume change and kinetics. Upon addition of molecular crowding agents, the ratio of the diffusion coefficient of the blue-shifted intermediate (pB) to that of the ground species (pG) significantly changes from 0.92 and approaches 1.0. This result indicates that the molecular volume change accompanied by the photocycle of PYP in molecularly crowded environments is much smaller than that which occurs in vitro and that the pB intermediate under crowded environments favors a compact conformation due to the excluded volume effect. The kinetics of the photocycle of PYP in cell-mimetic environments is greatly decelerated by the dehydration, owing to the interaction between the protein and small crowding agents, but is barely affected by the excluded volume effect. The results lead to the inference that the signaling transducer of PYP may not necessarily utilize the conformational change of PYP to sense the signaling state.