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Abstract Conducting real‐time, element‐specific studies of photo‐excited systems is a long‐standing challenge. The development of X‐ray free‐electron lasers (XFELs) has paved the way for the emergence of a promising technique: femtosecond X‐ray absorption spectroscopy (fs‐XAS). This powerful technique reveals electronic and geometric characteristics, providing unprecedented insight into their dynamic interactions under nonequilibrium conditions. Herein, the fs‐XAS technique is employed at PAL‐XFEL to unravel light‐driven ultrafast electronic and structural changes in epitaxial lanthanum iron oxide (LaFeO₃) thin films. Density functional theory (DFT) and multiplet calculations are utilized to expound on the experimental results. The analyses reveal that photoexcitation initially induces high‐ and intermediate‐spin Fe²⁺states through ligand‐to‐metal charge transfer (LMCT), followed by polaron formation. It is demonstrated that the reduced overlap between the oxygen 2pand iron 3dorbitals accounts for all experimental observations, including 1) the XAS shifts to lower energies, 2) the decrease in the crystal field splitting, and 3) the relatively larger shifts observed in the oxygen 1sXAS.