The authors investigate carrier dynamics in a passive InAs/InP quantum dot (QD) waveguide using 255 fs optical pulses at a central wavelength of 1568 nm. We observe strong anisotropy of absorption saturation for different polarizations. Pump–probe measurements indicate the presence of carrier relaxation dynamics on a timescale in the order of tens of picoseconds due to cascaded relaxation of carriers generated by two-photon absorption (TPA) from the bulk region to the QDs via the wetting layer. These relaxation timescales are much longer than in QD amplifiers. Our observations are supported by a rate-equation model which includes TPA, showing good agreement with the pump–probe measurements.