The steady state absorption and fluorescence spectroscopy of 2-(2′-hydroxyphenyl)benzoxazole (HBO) and (2,2′-bipyridine)-3, 3′-diol (BP(OH)2) were studied here free in solution and in human serum albumin (HSA) in order to test their applicability as new biological probes. HBO and BP(OH)2 are known to undergo intramolecular proton transfers in the excited state. Their absorption and fluorescence spectra are sensitive to environmental change from hydrophilic to hydrophobic, thus allowing the opportunity to use them as environment-sensitive probes. The effect of water on the steady state spectra of the two molecules also shows unique features which may position them as water sensors in biological systems. For HBO in buffer, fluorescence is only due to the syn-keto tautomer, whereas in HSA the fluorescence is due to four species in equilibrium in the excited state (the syn-keto tautomer, the anti-enol tautomer, the solvated syn-enol tautomer, and the anion species of HBO). Analysis of the fluorescence spectra of HBO in HSA indicates that HBO is exposed to less water in the HBO:HSA complex. For the BP(OH)2 molecule, unique absorption due to water was observed in the spectral region of 400-450 nm. This absorption decreases in the presence of HSA due to less accessibility to water as a result of binding to HSA. Fluorescence of BP(OH)2 is due solely to the di-keto tautomer after double proton transfer in the excited state. The fluorescence peak of BP(OH)2 shows a red-shift upon HSA recognition which is attributed to the hydrophobic environment inside the binding site of HSA. We discuss also the effect of probe-inclusion inside well-defined hydrophobic cavities of cyclodextrins.