Defect-mediated processes in two-dimensional transition metal dichalcogenides have a significant influence on their carrier dynamics and transport properties, however, the detailed mechanisms remain poorly understood. Here, we present a comprehensive ultrafast study on defect-mediated carrier dynamics in ion exchange prepared few-layer MoS₂ by femtosecond time-resolved Vis-NIR-MIR spectroscopy. The broadband photobleaching feature observed in the near-infrared transient spectrum discloses that the mid-gap defect states are widely distributed in few-layer MoS₂ nanosheets. The processes of fast trapping of carriers by defect states and the following nonradiative recombination of trapped carriers are clearly revealed, demonstrating the mid-gap defect states play a significant role in the photoinduced carrier dynamics. The positive to negative crossover of the signal observed in the mid-infrared transient spectrum further uncovers some occupied shallow defect states distributed at less than 0.24 eV below the conduction band minimum. These defect states can act as effective carrier trap centers to assist the nonradiative recombination of photo-induced carriers in few-layer MoS₂ on the picosecond time scale.