It has been well-established that light-matter interactions, as manifested by diverse linear and nonlinear optical (NLO) processes, are mediated by real and virtual particles, such as electrons, phonons, and excitons. Polarons, often regarded as electrons dressed by phonons, are known to contribute to exotic behaviors of solids, from superconductivity to photocatalysis, while their role in materials' NLO response remains largely unexplored. Here, the NLO response mediated by polarons supported by a model ionic metal oxide, TiO2, is examined. It is observed that the formation of polaronic states within the bandgap results in a dramatic enhancement of NLO absorption coefficient by over 130 times for photon energies in the sub-bandgap regions, characterized by a 100fs scale ultrafast response that is typical for thermalized electrons in metals. The ultrafast polaronic NLO response is then exploited for the development of all-optical switches for ultrafast pulse generation in near-infrared (NIR) fiber lasers and modulation of optical signal in the telecommunication band based on evanescent interaction on a planar waveguide chip. These results suggest that the polarons supported by dielectric ionic oxides can fill the gaps left by dielectric and metallic materials and serve as a novel platform for nonlinear photonic applications.