Fluorescence correlation spectroscopy (FCS) is a highly sensitive and selective technique with which one can analyze highly localized environments using the fluctuations in the average fluorescence of a probe fluorophore. Two-photon FCS has been proposed as a method to minimize photodamage to the probes and living organisms under observation. While multiphoton excitation reduces photodamage outside the focal volume, photodynamic effects within the volume can be substantial. The dynamics occurring in the focal excitation volume of a two-photon confocal microscope are examined using FCS of dye-loaded, 100 nm diameter polystyrene spheres. Multiphoton photodynamic events are observed which cannot be explained either by simple local solution heating or by intersystem crossing within a single excited dye molecule. The laser power dependence of photodynamics process suggests that a four-photon absorption by polystyrene and subsequent ablation of the sphere is the mechanism of fluorescence-reducing photodamage.