In this paper we present the basic principles of optical bistability and summarize the current advances in semiconductor optical switching, with emphasis on recent results in GaAs, CuCI, InAs, InSb, CdS, ZnS, and ZnSe etalons. These devices have great potential for applications involving optical signal processing and computing. As an example, we discuss the use of arrays of bistable devices for parallel optical processing and for addressable spatial light modulators. The use of nonlinear etalons as optical gates is also illustrated. To date, GaAs devices have shown the most favorable characteristics for practical applications. They operate at room temperature with a few milliwatts of power using a laser diode as the only light source. Quasi-cw operation and optical fiber signal regeneration have also been demonstrated. A GaAs NOR gate operates in 1 ps with <3 pJ incident energy; this, of course, implies a 1 ps switch-on time for a bistable etalon.