Topological insulators (TIs), as a two-dimensional (2D) material, have been widely used in optoelectronic devices. However, further enhancements of output pulses in ultrafast fiber lasers are limited by some aspects of materials, such as the modulation depth and relaxation time. In order to overcome the limitations of individual materials and improve the optical properties, in this work, a lateral heterostructure (LHS) material based on Sb₂Te₃–Bi₂Te₃ is prepared by hydrothermal synthesis. Its nonlinear optical (NLO) performance is measured by a twin-detector setup and femtosecond transient absorption spectrometer, determining that the LHS has a shorter recovery time and the modulation depth is nearly three times that of the other two individual materials. Then this LHS is analyzed via first principle calculation methods and it is found that carrier mobility by analog computation increases two orders of magnitude compared with the individual material Bi₂Te₃. Finally, this LHS as a saturable absorber (SA) is applied in the Er-doped fiber laser to realize the ultrafast pulse output with the highest repetition rate of 2.29 GHz. These results show that the LHS material has a better NLO performance than the individual material Bi₂Te₃. This approach that takes advantage of LHS to optimize the performance of materials provides a new direction for the design and application of 2D material in optoelectronic devices.