We report an observed transition from a saturable absorption type of behaviour to a reverse saturable absorption one for solid films of a guest-host system constituted by an organic chromophore, Amido Black 10B, embedded in a vinyl polymer, polyvinyl alcohol, and comprising a uniform distribution of aggregated nanoclusters, as studied using the standard Z-scan technique under low intensity continuous wave laser light excitation at 632nm, while increasing the concentration of the dye content. This is attributed to the presence of higher aggregates of the dye molecules in the sample. Besides this, the samples also displayed complex nonlinear refraction behaviour, yielding a net negative nonlinearity, explained on the basis of a possible, simultaneous occurrence of refractive nonlinearities of different origin, in addition to the obvious effect of absorption. The estimated values of the effective coefficients of nonlinear absorption, nonlinear refraction and third-order nonlinear susceptibility, |χ(3)|, compared to those reported for continuous wave laser light excitation, measure up to the highest among them. These nonlinear effects could be the basis for possible applications of this new reverse saturable absorption material, sensitive even to low power excitation, as an efficient material for use in nonlinear optical devices. © 2009 IOP Publishing Ltd.