With selective excitation around BChl-B800 and BChl-B850 absorption bands, we observed the evolution of excited-state dynamics in LH2 from Rhodobacter sphaeroides 601. The dynamical traces demonstrate a dominant excited-state absorption (ESA) followed concomitantly by an ultrafast transmission increase and decay with pulse-width limited time scale at 818 nm and 828 nm excitation. The ESA occurring prior to excitonic thermalization or ground-state bleach was observed at 840 nm as well. These experimental results indicate the competition between the transition from excitonic states to higher-lying excited states and interexciton relaxation, which are of physical significance for understanding excitation transfer and related mechanisms in LH2.