Strong saturated absorption at nanowatt power levels has been demonstrated using metastable xenon in a high finesse optical cavity. The use of metastable xenon allows a high quality factor of Q = 2 × 10(8) to be achieved at relatively high atomic densities without any contamination or damage to the optical surfaces, which is often a problem when using high-density rubidium or other alkali atoms. This technique provides a relatively straightforward way to produce nonlinearities at the single-photon level with possible applications in quantum communications and computing.