Transparent conducting oxides have recently gained great attention as CMOS-compatible materials for applications in nanophotonics due to their low optical loss, metal-like behavior, versatile/tailorable optical properties, and established fabrication procedures. In particular, aluminum-doped zinc oxide (AZO) is very attractive because its dielectric permittivity can be engineered over a broad range in the near-IR and IR. However, despite all these beneficial features, the slow (>100 ps) electron-hole recombination time typical of these compounds still represents a fundamental limitation impeding ultrafast optical modulation. Here we report the first epsilon-near-zero AZO thin films that simultaneously exhibit ultrafast carrier dynamics (excitation and recombination time below 1 ps) and an outstanding reflectance modulation up to 40% for very low pump fluence levels (<4 mJ/cm2) at a telecom wavelength of 1.3 μm. The unique properties of the demonstrated AZO thin films are the result of a low-temperature fabrication procedure promoting deep-level defects within the film and an ultrahigh carrier concentration.