Irradiating an InSb etalon with TEA CO2 laser pulses at 100ns (FWHM), optical bistability and instability were obtained respectively by two-photon excitation and self-defocusing under Gaussion beam at room temperatures. Based on the F-P nonlinear etalon theory, computer simulation of optical bistability was made for the above process. It was found that the self-defoeusing thus formed would lead to obvions instability of the output when a Ganssion beam was used at similar condition.