Multiple diffraction rings are observed after a pulsed laser beam passes through an absorbing dye LB film. The theoretical analysis, based on the model of transverse self-phase modulation, is also given. The saturated nonlinear refractive index n2 is estimated to be 2.0 x 10(-6) cm2/W from the number of rings induced in the LB films. The main contribution to this larger nonlinearity is believed to be from laser-induced transformation between H-aggregates and monomers of molecules in the LB films.