The photophysical properties of a new water-soluble fluorescent dye based on the perylene diimide chromophore are investigated at the ensemble and single molecule level. Water solubility was obtained by attaching hydrophilic substiments in the bay region. The fluorophore has an absorption maximum at 567 nm and a high quantum yield of fluorescence (0.6). In addition, the two-photon absorption cross section has higher or comparable values with the ones reported in the literature for other water-soluble dyes used in biological studies. The most important finding is its improved photostability in single molecule experiments when compared to other water-soluble dyes. This is demonstrated by the increased observation time of immobilized single molecules, which is almost 10 times higher than for commonly studied fluorophores. A possible reason is the lower intersystem crossing rate constant of perylene diimide in comparison, for example, to rhodamine derivatives. A similar conclusion can be drawn for this chromophore in an aqueous solution, because single molecule measurements using fluorescence correlation spectroscopy demonstrate a very low contribution of the triplet state in the autocorrelation function. The possibility of imaging the new molecule in living cells is demonstrated by one-photon confocal microscopy and by fluorescence lifetime microscopy with two-photon excitation.