We report a study of the excited-state absorption ͑ESA͒ in erbium-doped silica fiber ͑EDF͒ pumped at 977 nm, when the fiber is simultaneously excited by signal radiation at 1531 nm. We show, both experimentally and theoretically, that ESA efficiency at 977 nm gets strongly enhanced only in the presence of signal power. Experimentally, this conclusion is supported through the detection of upconversion emission, a "fingerprint" of the ESA process, and through the measurements of the EDF nonlinear transmission coefficient for the pump wavelength, which is sensitive to the ESA value. It is shown that the experimental data are precisely modeled with an advanced five-level Er 3+ model developed for the EDF.