We employed the complete active space self-consistent field (CASSCF) and its multistate second-order perturbation (MS-CASPT2) methods to explore the photochemical mechanism of 2-hydroxyazobenzene, the molecular scaffold of Sudan I and Orange II dyes. It was found that the excited-state intramolecular proton transfer (ESIPT) along the bright diabatic (1) ππ* state is barrierless and ultrafast. Along this diabatic (1) ππ* relaxation path, the system can jump to the dark (1) nπ* state via the (1) ππ*/(1) nπ* crossing point. However, ESIPT in this dark state is largely inhibited owing to a sizeable barrier. We also found two deactivation channels that decay (1) ππ* keto and (1) nπ* enol species to the ground state via two energetically accessible S1 /S0 conical intersections. Finally, we encountered an interesting phenomenon in the excited-state hydrogen-bonding strength: it is reinforced in the (1) ππ* state, whereas it is reduced in the (1) nπ* state. The present work sets the stage for understanding the photophysics and photochemistry of Sudan I-IV, Orange II, Ponceau 2R, Ponceau 4R, and azo violet.