The experimental work presented in this paper investigates the quality improvement of gain-switched (GS) sources. GS is a straightforward technique to achieve short pulses from diode lasers; however, such pulses exhibit long duration (10-100 ps), low power (in the milliwatt range), are asymmetric and are often generated along with pedestals or subpulses. Simultaneous compression and reshaping of these low quality pulses has been observed experimentally for several input power values. These effects have been achieved using a highly nonlinear optical-loop mirror, based on a microstructured optical fiber and a nonlinear semiconductor optical amplifier. It is designed to be compact and to directly process these complex pulses thus eliminating the requirement for prepulse conditioning. This offers overall benefits in terms of reduced system complexity. The quality of the pulses is characterized by their temporal width, pedestal height, duration, and spectral components. A maximum overall compression factor of 6 for a 10-mW average input power is observed. Additionally, the pulses obtained are observed to have improved quality for the input power range considered (500 µW to 30 mW, GS typical operational range) and the experimental scheme used preserves the compactness, efficiency, and simplicity of GS light sources.