We present a detailed investigation of pulse width and spectral dynamics of an Er3+‐doped soliton fiber ring laser, mode‐locked by a carbon‐nanotube‐polymer composite. The laser is stable and produces ∼ 650 fs pulses at a fundamental repetition rate of 20.8 MHz. The carbon nanotube saturable absorber has a low saturation intensity of ∼ 18.9 MW/cm2 and a 16.9% reduction in absorption (due to saturation) at high pulse intensity (∼ 270 MW/cm2). Spectral and transient effects confirm the soliton operation of the laser. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)