Exciton dissociation is a key step for the light energy conversion to electricity in organic photovoltaic (OPV) devices. Here, excitonic dissociation pathways in the high-performance, low bandgap “in-chain donor–acceptor” polymer PTB7 by transient optical absorption (TA) spectroscopy in solutions, neat films, and bulk heterojunction (BHJ) PTB7:PC71BM (phenyl-C71-butyric acid methyl ester) films are investigated. The dynamics and energetics of the exciton and intra-/intermolecular charge separated states are characterized. A distinct, dynamic, spectral red-shift of the polymer cation is observed in the BHJ films in TA spectra following electron transfer from the polymer to PC71BM, which can be attributed to the time evolution of the hole–electron spatial separation after exciton splitting. Effects of film morphology are also investigated and compared to those of conjugated homopolymers. The enhanced charge separation along the PTB7 alternating donor–acceptor backbone is understood by intramolecular charge separation through polarized, delocalized excitons that lower the exciton binding energy. Consequently, ultrafast charge separation and transport along these polymer backbones reduce carrier recombination in these largely amorphous films. This charge separation mechanism explains why higher degrees of PCBM intercalation within BHJ matrices enhances exciton splitting and charge transport, and thus increase OPV performance. This study proposes new guidelines for OPV materials development.