Novel nanohybrids of single-walled carbon nanotubes (SWNTs) encapsulating C60 or C70 with poly(3-hexylthiophene) (P3HT) have been prepared and their photophysics and photoelectrochemical properties are studied in detail for the first time. Strong π–π interaction between the SWNT sidewalls and P3HT afforded successful dissolution of the so-called fullerene peapods into an organic solvent, as in the case of empty SWNTs (p-SWNTs). Fluorescence emission of P3HT in the SWNT–P3HT hybrids was completely quenched by the SWNTs regardless of the fullerenes insertion. Transient absorption and fluorescence up-conversion techniques revealed the excited state dynamics of the nanohybrids, where exciplex formation from the short-lived P3HT singlet excited state (∼0.2 ps) with the fullerene peapods and subsequent relaxation to the ground state within ∼1 ps occurred dominantly. Significant difference in the photodynamics upon encapsulation of C60 or C70 was not detected, implying little participation of the fullerenes in the excited state event and thus the inability of the encapsulated fullerenes to generate the charge-separated state between the fullerene peapods and P3HT. Photoelectrochemical devices based on the peapod–P3HT nanohybrids showed almost the same incident photon-to-current efficiencies as those for the p-SWNT–P3HT-based device, which is in good agreement with the results of the time-resolved spectroscopies. Thus, the results obtained here will give a deep insight into the photophysics and photoelectrochemical properties of fullerene peapod–conjugated polymer as well as SWNT–conjugated polymer hybrids and therefore provide valuable information on the design of peapod-based optoelectronic devices.