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Summary form only given. Using ultrafast time-delayed pump-probe measurements, we study the mechanisms leading to stimulated emission (SE) and photoinduced absorption (PA) in thin films and solutions of poly[2-methoxy-5-(2'-ethylhexyloxy)-1,4-phenylenevinylene] (MEHPPV). We monitor the change in the excited-state spectra by means of femtosecond time-resolved nonlinear spectroscopy in order to identify the SE and PA spectral regions and their time evolution. We also present femtosecond gain-narrowing measurements and the influence of the PA on the photoluminescence spectra. We demonstrate bimolecular interaction at high excitation densities and independence of the PA and SE dynamics on the pump wavelength.