Liposomal formulations of meso-tetra(hydroxyphenyl)chlorin (mTHPC) have already been proposed with the aim to optimize photodynamic therapy. Spectral modifications of these compounds upon irradiation have not yet been investigated. The objective of this study was to evaluate photobleaching properties of mTHPC encapsulated into dipalmitoylphosphatidylcholine (DPPC) liposomes, Foslip. Fluorescence measurements in DPPC liposomes with different DPPC:mTHPC ratios demonstrated a dramatic decrease in fluorescence anisotropy with increasing local mTHPC concentration, thus suggesting strong interactions between mTHPC molecules in lipid bulk medium. Exposure of Foslip suspensions to small light doses (<50 mJ/cm2) resulted in a substantial drop in fluorescence, which, however, was restored after addition to the sample of a non-ionic surfactant Triton X-100. We attributed this behavior to photoinduced fluorescence quenching. This effect depended strongly on the molar DPPC:mTHPC ratio and was revealed only for high local mTHPC concentrations. The results were interpreted supposing energy migration between closely located mTHPC molecules with its subsequent dissipation by the molecules of photoproduct acting as excitation energy traps. We further assessed the effect of photoinduced quenching in plasma protein solution. Relatively slow kinetics of photoinduced Foslip response during incubation in the presence of proteins was attributed to mTHPC redistribution from liposomal formulations to proteins. Therefore, changes in mTHPC distribution pattern in biological systems would be consistent with changes in photoinduced quenching and would provide valuable information on mTHPC interactions with a biological environment.