Effects of environmental properties on linear and nonlinear response of Bromothymol blue (BTB) were studied. The role of optical band gap and dielectric constant, as well as thermal conductivity on optical properties of BTB molecule and cetyltrimethylammonium bromide (CTAB) with BTB complex were discussed using Z-scan instrument with 532 nm wavelength and 80 mW power, spectrophotometer and FT-IR spectra. The orders of nonlinear absorption coefficient, β, and nonlinear refractive index, n 2 , of BTB were obtained 10 -12 cm 2 /W and 10 -7 cm/W, respectively. The reverse saturable absorption is the main factors in the appearance of β. It was observed, enhancement up to 5 time in dielectric constant of environment cause reduction of about 6 time in nonlinear absorption and about 2 time in nonlinear refraction coefficient of solution. Moreover, the complex of CTAB can reduce optical band gap of BTB by 0.7eV. Results of DFT calculations have performed, via B3LYP method and 6-311G(d,p) basis, show enhancement of dipole moment of BTB with increase of dielectric constant of environment.