The degradation kinetics of a near‐infrared fluorescent, diagnostic, and photodynamic agent, indocyanine green (ICG), was investigated in aqueous solution by steady‐state fluorescence technique. The influence of ICG concentration on its fluorescence spectrum was determined. The degradation kinetics of ICG in aqueous solution was studied as a function of light exposure, type of light exposed, temperature, and ICG concentration. The degradation of ICG was found to follow first‐order kinetics. Exposure to light and high temperatures caused acceleration in the degradation. The type and intensity of exposed light also affected degradation. ICG aqueous solutions were found to be more stable in dark, at low temperatures, and at higher ICG concentrations. © 2003 Wiley‐Liss, Inc. and the American Pharmacists Association J Pharm Sci 92:2090–2097, 2003