In typical carbonyl-containing molecules, bond dissociation events follow initial excitation to nπC═O* states. However, in acetyl iodide, the iodine atom gives rise to electronic states with mixed nπC═O* and nσC-I* character, leading to complex excited-state dynamics, ultimately resulting in dissociation. Using ultrafast extreme ultraviolet (XUV) transient absorption spectroscopy and quantum chemical calculations, we present an investigation of the primary photodissociation dynamics of acetyl iodide via time-resolved spectroscopy of core-to-valence transitions of the I atom after 266 nm excitation. The probed I 4d-to-valence transitions show features that evolve on sub-100-fs time scales, reporting on excited-state wavepacket evolution during dissociation. These features subsequently evolve to yield spectral signatures corresponding to free iodine atoms in their spin-orbit ground and excited states with a branching ratio of 1.1:1 following dissociation of the C-I bond. Calculations of the valence excitation spectrum via equation-of-motion coupled cluster with single and double substitutions (EOM-CCSD) show that initial excited states are of spin-mixed character. From the initially pumped spin-mixed state, we use a combination of time-dependent density functional theory (TDDFT)-driven nonadiabatic ab initio molecular dynamics and EOM-CCSD calculations of the N4,5 edge to reveal a sharp inflection point in the transient XUV signal that corresponds to rapid C-I homolysis. By examining the molecular orbitals involved in the core-level excitations at and around this inflection point, we are able to piece together a detailed picture of C-I bond photolysis in which d → σ* transitions give way to d → p excitations as the bond dissociates. We also report theoretical predictions of short-lived, weak 4d → 5d transitions in acetyl iodide, validated by weak bleaching in the experimental transient XUV spectra. This joint experimental-theoretical effort has thus unraveled the detailed electronic structure and dynamics of a strongly spin-orbit coupled system.