A multilayer ceramic carrier for an optical element includes a terraced cavity for retaining a vertically receiving or vertically emitting optical element. The multilayer ceramic carrier includes conductive traces interposed between the ceramic layers and which extend into the terraced cavity along the trenches formed in the cavity. A vertical cavity surface emitting laser or vertically receiving optical element is wire bonded to the conductive traces which extend into the cavity. In one embodiment, the terraced cavity of the multilayer ceramic carrier includes a VCSEL and photodetector therein, the photodetector capable of monitoring the output optical power of the VCSEL. The method for forming the multilayer ceramic carrier includes forming a plurality of layers of ceramic tape, joining the layers, then co-firing the stacked layers. The multilayer ceramic carrier is joined to a plastic optical housing which includes an aperture for securing an optical fiber. The fiber launch direction is generally orthogonal to the optical surface of the vertically emitting or vertically receiving optical element secured within the ceramic carrier. The optical subassembly comprising the plastic optical housing and ceramic carrier is mounted on the surface of a printed circuit board or adjacent the edge of a printed circuit board, such that the light emitted or detected by the optical element, preferably travels along a fiber launch direction parallel to the surface of the printed circuit board. The optical assembly may be joined to the printed circuit board using various connectors capable of carrying an electrical signal.