Rutile TiO₂ and Ti_0.9In_0.1O₂ thin films were fabricated using a pulsed laser deposition method. We employed the optical transmission spectra to reveal the good transparency of the films in the visible spectral range of 330 to 900 nm. The absorption edge of the Ti_0.9In_0.1O₂ film is blue-shifted compared with that of undoped TiO₂ film. The third-order optical nonlinearity of the films was investigated by using a z-scan method with a pulse laser operating at 532 nm with a duration of 55 ps. The results show that the Ti_0.9In_0.1O₂ and TiO₂ films exhibit nonlinear saturable absorption and negative nonlinear refraction. The doping of In ions does not change the nonlinear optical absorption of the TiO₂ film significantly. However, the nonlinear refractive index of Ti_0.9In_0.1O₂ film is about two times larger than that of undoped TiO₂ film. The local electron-pinned defect-dipoles and widening bandgap in the Ti_0.9In_0.1O₂ film can be used to explain the observed results.