The role of confinement in the suppression of the excited-state reaction of the dye molecule auramine O in nanoscale water droplets is investigated by contrasting the behavior of the dye in solution and on regular and reverse micelles. Auramine O photophysics are studied in bulk water, at the interface between regular micelles and bulk water, and in the aerosol OT (AOT)-stabilized aqueous nanodroplet. It is shown that the reaction of auramine O in bulk water is to a first approximation determined by aqueous solvation dynamics rather than solvent viscosity. This is in contrast to the result in more viscous and slowly relaxing solvents, where the solvent viscosity controls the rate. This result suggests the possibility of multiple reaction pathways on the excited-state surface. The reaction rate at the regular micelle-water interface is slower than in bulk water but significantly faster than in nanoconfined water, indicating a distinct effect of confinement on the reaction rate. It is suggested that the degree of perturbation of the water structure at the interface is the factor controlling the rate of the reaction. Specifically, the water structure is strongly perturbed at the AOT-confined water interface, suppressing the ability of fast collective solvent reorientation to promote the auramine O excited-state reaction. This effect is less marked at the interface between the micelle and bulk water. The contrast between these results indicates a route whereby confinement modifies ultrafast reaction dynamics in micelles.