As a kind of two-dimensional transition metal dichalcogenide material, tungsten diselenide (WSe2) has attracted increasing attention, owing to its gapped electronic structure, relatively high carrier mobility, and valley pseudospin, all of which show its valuable nonlinear optical properties. There are few studies on the nonlinear optical properties of WSe2 and correlation with its electronic structure. In this paper, the effects of spatial self-phase modulation (SSPM) and distortion influence of WSe2 ethanol suspensions are systematically studied, namely, the nonlinear refractive index and third-order nonlinear optical effect. We obtained the WSe2 dispersions SSPM distortion formation mechanism, and through it, we calculated the nonlinear refractive index n2, nonlinear susceptibility χ(3), and their wavelength dependence under the excitation of 457 nm, 532 nm, and 671 nm lasers. Moreover, by use of its strong and broadband nonlinear optical response, all-optical switching of two different laser beams due to spatial cross-phase modulation has been realized experimentally. Our results are useful for future optical devices, such as all-optical switching and all-optical information conversion.