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We report the optical bistability and the self‐oscillation of a nonlinear Fabry–Perot etalon filled with Norland optical adhesive 81. A normal and an inverted bistable loop were observed for a short (80msec) and a long (1.2sec) input optical pulse duration, respectively. The self‐oscillation properties depended sensitively on the substrate and the spacer thicknesses. The measured self‐oscillation period became longer with an increase of the spacer thickness and was in the range o 0.2 to 3 seconds. The inversion of the bistable loop, and the self‐oscillation in this experiment can be explained by the competition between the fast thermal refractive index change and the slow linear thermal expansion of the etalon.