Dynamics of stimulated emission and ultrafast lasing in ZnO nano-multipods has been investigated with a femtosecond optical Kerr shutter technique. Under band-to-band excitation with high density, stimulated emission is observed around 395-400 nm with a mode-like structure. The stimulated emission emerges with an onset time of ∼2 ps and then the intensity gradually decreases with time having a blue-shift and a spectral narrowing. The characteristics of the blue-shift and spectral narrowing suggest that not only recovery of bandgap renormalization but also conversion from an electron-hole plasma (EHP) state to high density excitonic state takes place as the carrier density decreases due to recombination of electrons with holes. The mode-like structure observed strongly indicates that a high quality resonant cavity is formed between the two facets toward the leg length direction of individual nano-multipod. These results show that the ultrafast lasing observed around 395-400 nm in ZnO nano-multipods comes from population inversion in the EHP regime. We also found that the initial carrier distribution of the EHP regime in nano-multipods is much wider than that in ZnO thin films, implying that the carrier diffusion might be suppressed by their nano-size structure.