The photophysical behaviour and excited state decay kinetics of the fluorescent probe Nile red were used for quantitative monitoring of micropolarity, microviscosity and the sol-gel transition temperature of a copolymer hydrogel, pluronic F127. There was considerable enhancement of the emission intensity with a large blue shift in emission and an absorption maximum at and above the sol-gel transition temperature (20 °C), showing the sensitivity of Nile red fluorescence to the sol-gel transition. The estimation of micropolarity by comparing the Nile red emission maximum in dioxane-water mixtures suggested a considerable decrease in the polarity of the PF127 microenvironment from less polar (20% dioxane-water) in its sol phase to almost non-polar (90% dioxane-water) microenvironments in the gel phase. The thermotropic response of the wavelength dependent fluorescence lifetime of the probe with a rise time in the longer wavelength region has enabled monitoring of the microheterogeneity of the gel medium. With an increase in temperature, the microviscosity progressively increases from ∼10 mPa s (sol state) to ∼23 mPa s (gel state). The mismatch between microviscosity as estimated by the Nile red and the corresponding bulk viscosity reflected the microheterogeneity of the pluronic medium and its sensitivity towards PF127 microenvironments.