An in-situ study of the third-order optical nonlinearity of poly(bithiophene), PET, during electrochemical doping is conducted using subpicosecond degenerate four wave mixing (DEWM). Upon oxidation we observe a gradual increase of the optical nonlinearity in the very beginning of each steady-state charging cycle. At 602 nm the second hyperpolarizability of the generated free radical cations is found to be approximately one order of magnitude higher than that of the neutral polymer. Time-resolved experiments reveal that the dynamics of the photoexcited species in the slightly charged polymer is not significantly different from those in the neutral polymer. Similar results are obtained upon reduction. Further charging of the samples causes a dramatic reduction of the optical nonlinearity. This also has a remarkable influence on the time-resolved characteristics. The observed changes can be accounted for by assuming opposite signs of the effective incoherent chi((3)) for noninteracting species (the neutral polymer segments and the free radical-cations), on one hand, and intermolecularly interacting species (pi-dimerized radical-cations), on the other hand. The relaxation of the photogenerated excited states is faster in the charged than in the neutral or slightly charged state. This is interpreted in terms of new decay channels for excitons resulting from intermolecular interactions in the charged state. For the first time, charge-transfer-induced scattering effects are observed in a conjugated polymer. They appear at potentials where most of the material properties (e.g., conductivity and spin density) change dramatically. This scattering is interpreted in terms of a phase transition, which takes place in the polymer and which is the origin of hysteresis effect generally observed upon charging of conducting polymers.