The picosecond time-resolved Stokes shift of the laser dye coumarin 480 (I) is studied in Aerosol OT-heptane reverse micelles at various concentrations of water. On addition of water to a n-heptane solution of I containing 0.09 M AOT, the emission spectrum of I exhibits a prominent shoulder at 480 nm which is ascribed to the dye molecules in the water pool of the reverse micelles. In n-heptane, the fluorescence decays of I at short and long wavelengths are identical, which rules out any time-resolved Stokes shift. On addition of water to the AOT/heptane system, the decay at long wavelengths exhibit a distinct growth on the nanosecond time scale. This and the time-dependent Stokes shift indicate that the water molecules in the water pool of the AOT reverse micelles undergo slow relaxation on the nanosecond time scale.