We study the effects of dissipation on photoisomerization (PI). The result suggests the existence of two types of environment depending on whether it entangles with the molecule. With entanglement there is a quantum phase transition between a state where PI persists, to a state where PI is quenched by the environment. Without entanglement, the environment only quantitatively modifies the PI behavior. We discuss the relevance of our results to a recent STM experiment, and predict the signature of the quantum phase transition in optical absorption spectra.