Fluorescence correlation spectroscopy (FCS) and fluorescence photobleaching recovery (FPR) are two methods that may be used to measure diffusion and chemical reaction kinetics in small, labile systems such as biological cells. These methods are here applied to systems in which a fluorescent ligand can bind to a polyvalent substrate molecule in a multistep reaction sequence. The analytical theory for both FCS and FPR is extended to allow analysis of these kinds of systems. Experimental measurements of the binding of ethidium bromide to DNA by FCS confirm the theoretical analysis. (FPR measurements on the same system are reported in the accompanying paper.) The analysis shows that FCS and FPR perceive multivalent binding reactions differently. This difference results from the selective effect of the photobleaching process in the chemical reaction system. The development and results we report could have useful applications to a wide range of biopolymeric binding and assembly process.