Two-dimensional (2D) Sn-based perovskites exhibit significant potential in diverse optoelectronic applications, such as on-chip lasers and photodetectors. Yet, the underlying mechanism behind the frequently observed dual-peak emission in 2D Sn-based perovskites remains a subject of intense debate, and there is a lack of research on the carrier dynamics in these materials. In this study, we investigate these issues in a representative 2D Sn-based perovskite, namely, PEA2SnI4, through temperature-, excitation intensity-, angle-, and time-dependent photoluminescence studies. The results indicate that the high- and low-energy peaks originate from in-face and out-of-face dipole transitions, respectively. In addition, we observe an anomalous increase in the non-radiative recombination rate as temperature decreases. After ruling out enhanced electron–phonon coupling and Auger recombination as potential causes of the anomalous carrier dynamics, we propose that the significantly increased exciton binding energy (Eb) plays a decisive role. The increased Eb arises from enhanced electronic localization, a consequence of weakened lattice distortion at low temperatures, as confirmed by first-principles calculations and temperature-dependent x-ray diffraction measurements. These findings offer valuable insights into the electronic processes in the unique 2D Sn-based perovskites.