Time-resolved fluorescence decay of flavin adenine dinucleotide (FAD) was studied at room temperature in water and water-methanol mixtures by a fluorescence upconversion technique. The observations were focused on the most initial decay phase (200 ps), before the residual fluorescence assumes a single exponential decay, typical for an extended conformation of the fluorophore. Within the first few picoseconds, where most of the electron transfer coupled quenching takes place, the emission decay curves could be fitted by a stretched exponent, compatible with the inhomogeneous distance dependent electron transfer model. This implies that the population of the excited FAD molecules exhibits a large number of non-identical states, each with its own separation between the donor (adenine) and acceptor (isoalloxazine) moieties, having its own rate of electron transfer. To evaluate the distribution of the separation between the donor-acceptor pair, we carried out molecular dynamics simulations of closed conformation of the FAD in water and water-methanol mixtures, sampling the structure at 10 fs intervals. The analysis of the dynamics reveals that within the 4 ps time frame, where most of the nonexponential fluorescence relaxation takes place, the relative motion of the donor-acceptor pair is consistent with a one-dimensional Brownian motion, where the diffusion coefficient and the shape of the confining potential well are solvent dependent. The presence of methanol enhances the diffusion constant and widens the width of the potential well. On the basis of these parameters, the relaxation dynamics was accurately reconstructed as an electron transfer reaction in an inhomogeneous system where the reactants are diffusing within the time frame of the observation.