Recently, the semiconducting material NbOCl₂, a room-temperature ferroelectric with weak interlayer coupling and a strong nonlinear optical response, has attracted significant attention owing to its potential applications in ultra-compact on-chip photonic devices. In this study, we systematically investigate the photogenerated carrier dynamics, ferroelectric polarization behavior, and evolution of the electronic structure in NbOCl₂ under high pressure using a diamond anvil cell (DAC) combined with insitu measurement techniques, including femtosecond optical pump–optical probe (fsOPOP) spectroscopy, steady-state second harmonic generation (SHG), and timeresolved second harmonic generation (TR-SHG) spectroscopy. Our experimental results reveal that as pressure increases, the SHG intensity significantly decreases, with a turning point in its pressure dependence observed around 2 GPa, suggesting a ferroelectric-to-antiferroelectric phase transition. Upon further compression to approximately 10 GPa, the system exhibits a coexistence of ferroelectric and antiferroelectric phases. The pressure-induced evolution of the optical bandgap, derived from high-pressure absorption spectroscopy, further indicates a close correlation between changes in the electronic structure and the SHG signal. Using high-pressure fs-OPOP spectroscopy, we observe exciton formation on a sub-picosecond timescaleand rapid interband recombination involving surface defects on a picosecond timescale, with the relaxation times of both processes increasing with pressure. The bandgap narrowing under high pressure increases the energy difference between the pump photon energy and the bandgap, resulting in photogenerated carriers with higher initial kinetic energy and electron temperature, thereby prolonging hot carrier cooling and exciton formation, which is reflected in an increase in the fast time constant. The evolution of the slow relaxation time with pressure results from the competition among several factors, including bandgap narrowing, enhanced many-body effects, and changes in defect states. Furthermore, high-pressure TR-SHG experiments reveal that above-bandgap excitation induces modulation of the ferroelectric polarization. The relaxation behavior observed in these experiments is consistent with the photocarrier dynamics revealed by fs-OPOP spectroscopy under low-pressure conditions, supporting a physical picture in which photogenerated carriers regulate ferroelectric polarization via a charge screening mechanism. This work provides important experimental evidence for investigating the non-equilibrium dynamic behavior of ferroelectric materials and achieving ultrafast modulation of ferroelectric polarization under high-pressure conditions.