An adiabatic theory of polyatomic photodissociation is developed that explicitly treats the interaction between the relative and internal motion and leads to an expression for the nuclear wavefunction of the final dissociative state which differs considerably from the zeroth-order distorted-wave approximation. The vibrational frequencies wi of the fragments are found to depend on the interfragment distance. In the evaluation of the matrix element needed to describe the energy distribution of the fragments, it is found necessary to use values of wi different from the frequencies of the free fragments. These values of wi can be expressed in terms of the force constants of the precursor system. Inverse vibrational distributions are obtained from this theory in accord with recent experimental data.