Transparent conductive oxides (TCOs) are widely integrated in the field of optoelectronics since they are optically transparent and electrically conductive at the same time. Indium tin oxide (ITO) is a well-developed TCO, but due to its high cost, aluminum zinc oxide (AZO) is now emerging as a promising low-cost replacement for ITO. This work reports on AZO thin film prepared with polyvinyl alcohol (PVA) as a host material. The AZO–PVA thin film was incorporated into an erbium-doped fiber laser (EDFL) as a saturable absorber for the first time. Both Q-switched and nanosecond pulse mode-locked operation were experimentally achieved. The Q-switched EDFL operated at the center wavelength of 1559.6 nm, which had the shortest pulse width of 2.2 µs, the maximum repetition rate of 86 kHz and the highest pulse energy of 47.3 nJ. The mode-locked was achieved at the center wavelength of 1560.4 nm.