There is a pressing need to discover optical and magneto-optical materials with better performance and lower cost that operate at telecommunication wavelengths. Here, we report the discovery of giant negative nonlinear refraction and nonlinear (photoinduced) Faraday rotation at 1550 nm using an array of bimetallic Fe−Ag nanopyramids. This system exhibited a very large third-order nonlinear refractive index (n 2 = −2.32 cm 2 /GW) and nonlinear figure of merit (F = 2.3). The same system also exhibited an extraordinarily large magneto-optical susceptibility (χ i 4 = 6.5 × 10 −12 esu) and nonlinear Faraday rotation up to 2.5 radian/μm at a magnetic field of 0.5 T. The nonlinear response was dependent on the degree of overlap of the Fe nanopyramid on the Ag nanopyramid, which influences the strength of plasmon-induced dipoles on the Ag nanopyramid. This nanoscale system opens up a rich set of possibilities in utilizing magnetoplasmonic materials to miniaturize future multifunctional devices such as frequency converters and Faraday rotators at telecommunication wavelengths.