Organic semiconductor-incorporated two-dimensional (2D) hybrid perovskites, where organic ligands and an inorganic sublattice form an electronically coupled interface, have emerged as exciting platforms for achieving new properties beyond either individual component alone or conventional 2D perovskites with electronically inert ligands. However, the interfacial optical phenomena and excited-state processes in this emerging family of hybrid semiconductors remain largely unexplored, impeding the exploration of their functionalities. Here, by combining time-resolved spectroscopy and ab initio calculations, we unambiguously identify a below-gap interfacial charge-transfer (CT) transition in the model system (BTm)2PbI4 with type II energy level alignment. The oscillator strength of the CT transition exhibits a positive correlation with structural distortion, indicating the essential role of dynamic lattice disorder on the optically active CT transition. Importantly, the interfacial CT transition enables a previously unrecognized excited-state pathway, where photoexcitation of the below-gap CT transition leads to direct molecular triplet generation in ligands that subsequently drives photon upconversion by triplet-triplet annihilation with an energy gain of 0.42 eV. Our findings not only establish emergent optical activity and photophysical pathways at the organic-inorganic interface but also provide a new strategy for achieving triplet sensitization and photon upconversion by harnessing below-gap photons using 2D organic-inorganic hybrid semiconductors.