Plants, algae, and cyanobacteria have developed mechanisms to decrease the energy arriving at reaction centers to protect themselves from high irradiance. In cyanobacteria, the photoactive Orange Carotenoid Protein (OCP) and the Fluorescence Recovery Protein are essential elements in this mechanism. Absorption of strong blue-green light by the OCP induces carotenoid and protein conformational changes converting the orange (inactive) OCP into a red (active) OCP. Only the red orange carotenoid protein (OCPr) is able to bind to phycobilisomes, the cyanobacterial antenna, and to quench excess energy. In this work, we have constructed and characterized several OCP mutants and focused on the role of the OCP N-terminal arm in photoactivation and excitation energy dissipation. The N-terminal arm largely stabilizes the closed orange OCP structure by interacting with its C-terminal domain. This avoids photoactivation at low irradiance. In addition, it slows the OCP detachment from phycobilisomes by hindering fluorescence recovery protein interaction with bound OCPr. This maintains thermal dissipation of excess energy for a longer time. Pro-22, at the beginning of the N-terminal arm, has a key role in the correct positioning of the arm in OCPr, enabling strong OCP binding to phycobilisomes, but is not essential for photoactivation. Our results also show that the opening of the OCP during photoactivation is caused by the movement of the C-terminal domain with respect to the N-terminal domain and the N-terminal arm.