Temporal evolution of transient absorption (TA) spectra of electrons generated by above-the-gap (12.4 eV total energy) two-photon ionization of liquid H2O and D2O has been studied on femto- and picosecond time scales. The spectra were obtained at intervals of 50 nm between 0.5 and 1.7 mum. Two distinct regimes of the spectral evolution were observed: t < 1 ps and t > 1 ps. In both of these regimes, the spectral profile changes considerably with the delay time of the probe pulse. The "continuous blue shift" and the "temperature jump" models, in which the spectral profile does not change as it progressively shifts, as a whole, to the blue, are not supported by our data. Furthermore, no p-state electron, postulated by several authors to be a short-lived intermediate of the photoionization process, was observed by the end of the 300 fs, 200 nm pump pulse. For t < 1 ps, two new TA features (the 1.15 mum peak and 1.4 mum shoulder) were observed for the electron in the spectral region where O-H overtones appear in the spectra of light water. These two features were not observed for the electron in DO. The 1.4 mum peak observed in DO may be the isotope-shift analogue of the 1.15 mum feature in H2O. Vibronic coupling to the modes of water molecules lining the solvation cavity is a possible origin of these features. On the sub-picosecond time scale, the absorption band of solvated electron progressively shifts to the blue. At later delay times (t > 1 ps), the position of the band maximum is "locked", but the spectral profile continues to change by narrowing on the red side and broadening on the blue side; the oscillator strength is constant within 10%. The time constant of this narrowing is ca. 0.56 ps for H2O and 0.64 ps for D2O. Vibrational relaxation and time-dependent decrease in the size and sphericity of the solvation cavity are suggested as possible causes for the observed spectral transformations in both of these regimes.