Two photon absorption processes in InAs∕In01.5Ga0.85As∕GaAs quantum dot-in-a-well photodetectors are studied using free electron laser excitation. Two photon induced, normal incidence photocurrent, observed in the range of 20–30μm, arises from sequential near-resonant two-step transitions involving electron ground to first excited states in the dot, to quantum well final states. We find a two photon absorption coefficient of β∼1×107cm∕GW at 26.5μm (47meV) and 0.8V applied bias. Second-order autocorrelation measurements exhibit two characteristic time constants of ∼3 and ∼40ps. The latter is associated with the intermediate state electron lifetime, whereas the short decay is explained by the involvement of acoustic phonon assisted transitions.