The nonlinear optical (NLO) response of indium tin oxide films covered with Au@Ag colloid layer was characterized by a femtosecond single-beam open aperture (OA) Z-scan technique in this study. As the Au@Ag thickness increased, the transition from saturated absorption (SA) to reverse saturated absorption (RSA) was found in these ITO matrix composites. The nonlinear absorption coefficient for these composite materials can be regulated from −6.85 × 10−7m/W to 26.06 × 10−7m/W. In addition, this work also characterized the structure, morphology, and other optical properties of the specimen, and the finite-difference time-domain (FDTD) results were consistent with the experimental results. The NLO response of the ITO/Au@Ag composites can be attributed to the phase properties, synergistic competition effect, strong interaction based on the epsilon-near-zero (ENZ) mode, and localized surface plasmon resonance (LSPR) between the indium tin oxide films and Au@Ag.