Abstract In this paper we investigate the nonlinear dynamics for optical bistabile (OB) model of homogeneously broadened two-level atomic medium interacting with a single mode of the ring cavity in the presence of a Kerr-nonlinear blackbody (KNB) radiation reservoir. We show the impact of the relative temperature of the reservoir on the transition between the dynamical states via bifurcation diagrams that represents the relation between maximum values of the output field and the relative temperature for fixed input field. Specifically, decreasing the relative temperature (T b ) causes the system to bifurcate from periodic to chaotic behavior and in turn reverts back to periodic behavior with further decrease of T b . Varying atomic detuning leads to a change in the nature of the dynamic transition between the system’s states from self pulsing to chaotic behavior.