Vanadium dioxide undergoes a thermally induced first order phase change from semiconductor to metal near 67°C. In thin-film form, significant optical contrast can be produced at visible wavelengths on switching from low to high temperature phases. If the film is locally heated (e.g. by means of a laser) so that the temperature is driven above the transition point, the color or reflectance is changed only in that local region. Upon removal of the heat source the temperature returns to equilibrium. The local contrast, however, is either removed (dynamic operation), or stored indefinitely (memory operation) depending on the equilibrium or "bias" temperature. This storage option is possible because the material deposited as a thin film exhibits hysteresis, i.e., the curve describing the state of the film vs. temperature is double valued in the transition region. In order to erase information from a film region, that region must be lowered in temperature to a level below the onset of hysteresis. The general properties of vanadium dioxide thin film suggest a material suitable for recording optical information in a high density, digital format allowing erasure and reuse. Practical feasibility has been examined at Vought during the past year by a series of performance measurements. For example, laser writing of one micron diameter spots in less than 50 nanoseconds has been accomplished, and the amount of energy required for writing is compatible with laser diodes. These measurement results and data on contrast, storage time, and film surface morphology will be presented. The size of individual crystallites comprising the vanadium dioxide film is expected to fix ultimate spatial resolution.