Excitation of the s-p transition of Ag isolated in a Xe crystal leads to a dynamic Jahn-Teller splitting which, in addition to spin-orbit coupling, removes the degeneracy of the excited p orbital. The dynamics on these Jahn-Teller surfaces and the vibrational relaxation leading to strongly Stokes shifted emission bands is studied with 170 fs time resolution. The wave packet dynamics is followed by one-color resonant pump-probe spectroscopy and a recurrence at 1.3 ps after excitation into the upper two states of the triplet is observed. Two-color fluorescence depletion experiments are used to investigate the dynamics during relaxation to the minima of the excited states. Excited state absorption competes with stimulated emission and an energy of the Ag+ state in Xe is deduced to 5.73 eV.