Nile Red (NR) has been widely used as a microenvironmental probe since its luminescence characteristics depend strongly on medium polarity, viscosity, and hydrophobicity. The driving source for the internal motion of NR in rigid media is an absorbed photon that induces the molecule to rotate internally, causing the matrix deformed. Reversible (elastic) deformation and irreversible (plastic) deformation will influence the twisting dynamics in a different manner. In this work, we have investigated its excited state motion in a polymer nanocomposite, wherein polyvinyl alcohol (PVA) and nanodiamonds (NDs) were used as a matrix and a filler, respectively. PVA is a hydrophilic polymer having good chemical resistance, processability, and gel formation ability. Nanodiamond is a good candidate as a nanofiller for polymer composites. The elastic modulus of the polymer nanocomposite was measured by atomic force microscopy (AFM) nanoindentation and the emission lifetime of NR embedded in the polymer nanocomposite by time-resolved emission spectroscopy. Our results show that the fluorescence lifetime of NR is correlated well to the elastic modulus of polymer nanocomposite.