The present work demonstrates the ultrafast carrier dynamics and third-order nonlinear optical properties of electrochemically fabricated free-standing porous silicon (FS-PSi)-based optical microcavities via femtosecond transient absorption spectroscopy (TAS) and single-beam Z-scan techniques, respectively. The TAS (pump: 400 nm, probe: 430-780 nm, ∼70 fs, 1 kHz) decay dynamics are dominated by the photoinduced absorption (PIA, lifetime range: 4.7-156 ps) as well as photoinduced bleaching (PIB, 4.3-324 ps) for the cavity mode (λc) and the band edges. A fascinating switching behavior from the PIB (-ve) to the PIA (+ve) has been observed in the cavity mode, which shows the potential in ultrafast switching applications. The third-order optical nonlinearities revealed an enhanced two-photon absorption coefficient (β) in the order of 10-10 mW-1 along with the nonlinear refractive index (n2) in the range of 10-17 m2 W-1. Furthermore, a real-time sensing application of such FS-PSi microcavities has been demonstrated for detecting organic solvents by simultaneously monitoring the kinetics in reflection and transmission mode.