Optical bistability has been observed in highly concentrated fluorescein dye solution and in thin (~1 μm) doped polymeric films. For fluorescein, at concentrations larger than 10-5 mole/1 dye dimers are formed. The dimer-monomer equilibrium constant is 1051/mole so that most of the dye species are in the dimer form. At 480 nm the dimer absorption cross section is 10-18cm2/molecule, while that for the dye monomer molecule is 7.6x10-17cm2/molecule. Upon laser excitation dimers dissociate to form monomers thus providing a highly nonlinear laser induced absorption. The high nonlinear absorption coefficient can be utilized for optically bistable response of the dye system. Optical bistability was observed by placing dye solutions or dye thin films inside a Fabry-Perot resonator and exciting it with 480 nm dye laser pulses of 10 ns duration. The effect is more pronounced in 10-4; mole/1 fluorescein than in 10-6mole/1 fluorescein in which dimer formation is not that efficient. In disodium fluorescein, eosin and erythrosin dye samples no significant dimer formation is observed even at 10-3 mole/1 dye concentration. The observed bistability in both solution and in thin films can be explained in terms of recent models for optical bistability in nonlinearly absorbing molecular systems.