Absorption loss in barium sodium niobate (BSN) crystals at both the 1.064‐&mgr;m fundamental and 0.532‐&mgr;m SH wavelengths perturbs the SHG phase‐matching condition, thereby coupling the circulating and SH power with the nonlinear loss. Discrete transitions in circulating power, hysteresis in the intracavity SHG temperature phase‐matching signature, and bistable operation are the direct result of this absorption loss. Extensive analytical and experimental results were obtained and are reported.