Solutions and layer-by-layer self-assembled thin films containing Rose Bengal and poly(diallyldimethylammonium chloride) are studied with the aim of understanding the interactions controlling their structures and the photophysics of the dye in both media. A detailed spectroscopic and theoretical analysis shows that hydrophobic interactions among dye molecules contribute to the coiling of the polyelectrolyte chain in solution at low polyelectrolyte/dye (P/D) ratios, whereas extensive aggregation of the dye takes place even at ratios as high as 10(4) (expressed in monomeric units). A polyelectrolyte elongated form prevails in self-assembled thin films, providing an environment that reduces hydrophobic interactions and lowers the aggregation tendency. Self-assembled films with a roughly estimated overall dye concentration around 1 M at a P/D ratio in the order of seven are fluorescent and photogenerate singlet molecular oxygen. This contrasts with the behavior of polyelectrolyte solutions, which are almost nonfluorescent and do not evidence triplet state generation at the same P/D ratio.