Abstract2D semi‐metallic hafnium ditelluride material is used in several applications such as solar steam generation, gas sensing, and catalysis owing to its strong near‐infrared absorbance, high sensitivity, and distinctive electronic structure. The zero‐bandgap characteristics, along with the thermal and dynamic stability of 2D‐HfTe2, make it a desirable choice for developing long‐wavelength‐range photonics devices. Herein, the HfTe2‐nanosheets are prepared using the liquid‐phase exfoliation method, and their superior nonlinear optical properties are demonstrated by the obtained modulation depth of 11.9% (800 nm) and 6.35% (1560 nm), respectively. In addition, the observed transition from saturable to reverse saturable absorption indicates adaptability of the prepared material in nonlinear optics. By utilizing a side polished fiber‐based HfTe2‐saturable absorber (SA) inside an Er‐doped fiber laser cavity, a mode‐locked laser with 724 fs pulse width and 56.63 dB signal‐to‐noise ratio (SNR) is realized for the first time. The generated laser with this SA has the second lowest mode‐locking pump threshold (18.35 mW), among the other 2D material based‐SAs, thus paving the way for future laser development with improved efficiency and reduced thermal impact. Finally, employing this HfTe2‐SA, a highly stable single‐frequency fiber laser (SNR ≈ 74.56 dB; linewidth ≈ 1.268 kHz) is generated for the first time, indicating its promising ultranarrow photonic application.