The present work demonstrates a detailed characterization of the interaction of a bio-active drug molecule 3,5-dichlorosalicyclic acid (3,5DCSA) with a model transport protein Bovine Serum Albumin (BSA). The drug molecule is a potential candidate exhibiting Excited-State Intramolecular Proton Transfer (ESIPT) reaction and the modulation of ESIPT photophysics within the bio-environment of the protein has been exploited spectroscopically to monitor the drug-protein binding interaction. Apart from evaluating the binding constant (K (±10%) = 394 M(-1)) the probable location of the neutral drug molecule within the protein cavity (hydrophobic subdomain IIA) is explored by AutoDock-based blind docking simulation. The rotational relaxation dynamics of the drug within the protein has been interpreted on the lexicon of the two-step and wobbling-in-cone model. Circular dichroism (CD) spectroscopy delineates the effect of drug binding on the protein secondary structure in terms of decrease of α-helical content of BSA with increasing drug concentration. Also the esterase activity of the drug:protein conjugate system is found to be reduced in comparison to the native protein.