Self-induced phase modulation in erbium-doped polycrystalline Y2O3 integrated-optic waveguides is studied by use of a Mach-Zehnder interferometric setup. We determined the wavelength dispersion of the nonlinear refractive index near the F-4(9/2) absorption band and show that it corresponds qualitatively with a Kramers-Kronig analysis. The nonlinear coefficient at 670 nm was determined to be 1.4 x 10(-14) m2/W and has an electronic origin with a slow relaxation time of 6 ms.