Optically induced nematic liquid crystal (NLC) axis reorientations result in extraordinarily large nonlinear refractive index changes. We discuss the origins of these nonlinearities, and recently, obtained results of experimental studies of photovoltage generation, dynamic grating diffraction, and image conversion using dye-doped NLC films in all-optical configurations are presented. These processes are characterized by unprecedented low threshold laser powers. For example, we have demonstrated incoherent–coherent image conversion with laser intensity on the order of 70 microWatts/cm 2.