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The metal halide Cs₃Cu₂I₅ displays anomalous optical properties: an optical absorption onset in the ultraviolet region (∼ 330 nm) with highly efficient luminescence in the blue region (∼ 445 nm). Although self-trapped exciton formation has been proposed as the origin of giant Stokes shift, its connection to the photoluminescence quantum yield exceeding 90% remains unknown. Here, we explore the photochemistry of Cs₃Cu₂I₅ from first-principles and reveal a low energy barrier for exciton self-trapping associated with Cu–Cu dimerization. Kinetic analysis shows that the quantum yield of blue emission in Cs₃Cu₂I₅ is sensitive to the excited carrier density due to the competition between exciton self-trapping and band-to-band radiative recombination.