A GFP-like fluorescent protein, Dronpa, which was engineered from a coral Pectiniidae, was found to display perfect photochromic properties; the fluorescent "on"-state and nonfluorescent "off"-state of Dronpa can be reversibly switched by irradiation of two different wavelengths of light. To understand the detailed mechanism of the reversible photoswitching process at the atomic level, we performed QM and ONIOM(QM:MM) calculations to study the nature of the proposed on-state and off-state. Several high-level QM methods (TD-B3LYP, CASSCF, CASPT2, and SAC-CI) were employed to compute the vertical absorption and emission energies in the gas phase for four different protonation states as well as two conformations. The vertical absorption and emission energies of the on- and off-states in the proteins were further studied by the ONIOM(QM:MM) calculations. The ONIOM calculations on the absorption and emission suggest the neutral trans form is the off-state and the anionic cis form is the on-state. The dominant protonation states of the on- and off-states are also supported by protonation probability calculations via Poisson-Boltzmann electrostatics and Monte Carlo sampling. Moreover, the local protein environments were found to influence protonation states of the chromophore. Different possible reaction mechanisms are also discussed.