An optical inverter (10) that uses a saturable absorber (28) to distinguish between a logical one and a logical zero. A low power laser (18) generates an optical beam that is split into a first beam that propagates among a first beam path (24) and a second beam that propagates along a second beam path (26). The saturable absorber (28) is an optical switch that is positioned in the first beam path (24), and is switched from an opaque mode to a transparent mode when it receives an optical input signal. The first beam and the second beam are recombined as an optical output beam in an optical combiner (30). The first beam path (24) and the second beam path (26) have a length relative to each other such that the first and second beams are 180.degree. out of phase when they reach the optical combiner (30). Therefore, if the saturable absorber (28) is switched to the transparent mode, the first and second beams combine destructively and the optical output beam is dark, or a logical zero. When the saturable absorber (28) is in the opaque mode, the first beam is blocked so that the optical output beam is the second beam, providing a logical one. A second saturable absorber (34) can be provided to receive the optical output beam from the combiner (30) to absorb residual light when the output beam is dark. Additionally, an optical amplifier (36) can be provided to receive the optical output beam from the combiner (30) to amplify the optical output beam to a consistent, predetermined output level.