In this paper, we have successfully demonstrated a Q-switched pulse generation utilizing lutetium oxide (Lu₂O₃) thin film based saturable absorber (SA) in all-fiber erbium-doped fiber laser (EDFL) cavity with a bidirectional pumping. The Lu₂O₃ powder is mixed with isopropyl alcohol (IPA) solution before we add polyvinyl alcohol (PVA) as our host polymer to make the Lu₂O₃ into a thin film. By inserting the Lu₂O₃-PVA thin film into a bidirectional pumped EDFL cavity, a stable Q-switched pulse is realized with repetition rate in a range of rose from 43.67 kHz to 57.74 kHz whereas the pulse width decreased from 14.48 μs to 11.20 μs. This result indicates that the Lu₂O₃ can be implemented as an SA device in an EDFL as it owns a linear absorption of around 3 dB at 1 567 nm.