We present the design, fabrication, and characterization of III-nitride quantum-well waveguides optimized for nonlinear-optical switching via intersubband transitions. A dielectric structure consisting of an AlN lower cladding and a GaN cap layer allows minimizing the propagation losses while maintaining a large modal overlap with the quantum-well active layer. A strong nonlinear saturation of the intersubband absorption near 1.55 mum is demonstrated at record low input powers for these materials; in particular, a 3-dB saturation pulse energy of less than 10 pJ with 240-fs pulses is measured. Combined with the well established sub-picosecond recovery lifetimes of intersubband absorption in III-nitride quantum wells, these results are very promising for all-optical switching applications in future ultrafast fiber-optic communication networks.