Optical nonlinearities of PbSe are studied in picosecond pump‐probe experiments at wavelengths from 4 to 8 &mgr;m. Excitation of an electron‐hole plasma leads to a shift of the absorption edge to higher energies and to large changes of the refractive index by up to −0.1 for a carrier density of 4×1017cm−3. The optical nonlinearities result from band filling by both electrons and holes. The time‐dependent absorption change shows a partial recovery within 100 ps, giving evidence of enhanced recombination rates. Theoretical calculations of the absorption change are in agreement with the experimental data.