Dynamic holography and polarimetric techniques are used to study the photoisomerization kinetics of D2 bisazo dye and the excitation transfer from dye to nematic liquid crystal host. As a result of this transfer, transient modulation of the orientational order parameter, three-dimensional long-scale molecular transient rotation and equilibrated two-dimensional molecular rotations are identified in the host. Amplified rotation of nematic molecules is observed which is much more efficient for the dye photoexcitation with a wavelength in the red rather than in the blue side of its absorption band. The possible role of dye photoisomerization mechanism in these processes is discussed. The dynamic character of the dye induced torque and the presence of long-living intermediate states during photoisomerization and their diffusion are suggested. (C) 1997 American Institute of Physics.