Near-infrared (NIR) light harvesting has enormous importance for different potential applications in the modern era of research. Some NIR cyanine dyes such as IR820 have achieved great success in energy harvesting and cancer therapy. However, their action is limited for low photostability, considerable thermal degradation, short circulation times, and nonspecific biodistribution. Our present study is an attempt to overcome such limitations by attaching a model cyanine dye IR820 with ZnO nanoparticles. We prepared an IR820-ZnO nanohybrid and characterized it using microscopic and optical spectroscopic tools. Thermogravimetric analysis depicted greater thermal stability of the IR820-ZnO nanohybrid compared to free dye. We explored the enhancement in the photostability of IR820 upon nanohybrid formation. We detected generation of photoinduced reactive oxygen species (ROS) such as superoxide, singlet oxygen, and so forth using appropriate molecular probes. The formation of IR820-ZnO nanohybrid reduced production of photoinduced singlet oxygen. However, it revealed an alternative trend in overall ROS formation (increases total ROS) under red light illumination. To correlate the enhanced photostability of IR820 on the ZnO surface, we explored excited-state dynamical processes at the interface in nanohybrids. We illustrated the photoinduced excited-state electron-transfer process from the lowest unoccupied molecular orbital of IR820 to the conduction band of ZnO. This photoelectron-transfer process enhances the production of ROS and decreases the formation of singlet oxygen that altogether leads to improvement in photostability and overall activity. A quencher of singlet oxygen sodium azide (NaN3) was used to further confirm the direct association of singlet oxygen generation with the photostability issue of IR820. Also, ZnO is able to deliver the dye selectively in acidic environment, which suggests its diseased site-specific targeted activity. Our results provide promising improvement for potential use of IR820 through formation of a nanohybrid that could be translated for other NIR cyanine dyes.