Low-dimensional　bismuth　oxychalcogenides　have　shown　promising　potential　in　optoelectronics　due　to　their　high　stability,　photoresponse,　and　carrier　mobility.　However,　the　relevant　studies　on　deep　understanding　for　Bi2O2S　is　quite　limited.　Here,　comprehensive　experimental　and　computational　investigations　are　conducted　in　the　regulated　band　structure,　nonlinear　optical　(NLO)　characteristics,　and　carrier　dynamics　of　Bi2O2S　nanosheets　via　defect　engineering,　taking　O　vacancy　(OV)　and　substitutional　Se　doping　as　examples.　As　the　OV　continuously　increased　to　≈35%,　the　optical　bandgaps　progressively　narrow　from　≈1.21　to　≈0.81 eV　and　NLO　wavelengths　are　extended　to　near-infrared　regions　with　enhanced　saturable　absorption.　Simultaneously,　the　relaxation　processes　are　effectively　accelerated　from　tens　of　picoseconds　to　several　picoseconds,　as　the　generated　defect　energy　levels　can　serve　as　both　additional　absorption　cross-sections　and　fast　relaxation　channels　supported　by　theoretical　calculations.　Furthermore,　substitutional　Se　doping　in　Bi2O2S　nanosheets　also　modulate　their　optical　properties　with　the　similar　trends.　As　a　proof-of-concept,　passively　mode-locked　pulsed　lasers　in　the　≈1.0 µm　based　on　the　defect-rich　samples　(≈35%　OV　and　≈50%　Se-doping)　exhibit　excellent　performance.　This　work　deepens　the　insight　of　defect　functions　on　optical　properties　of　Bi2O2S　nanosheets　and　provides　new　avenues　for　designing　advanced　photonic　devices　based　on　low-dimensional　bismuth　oxychalcogenides.　©　2023　Wiley-VCH　GmbH.