An optical inverting system employs a first optical structure having an index of refraction that varies with the intensity of an incident beam and a second optical structure having a constant index of refraction, and forming an interface therebetween. An optical pulse stream is combined with a laser beam and the combined beam is applied to the first optical structure, impinging the interface at a predetermined angle of incidence. If the angle of incidence is less than a critical angle, the beam is refracted into the second optical structure. If the angle of incidence is greater than the critical angle, the beam is completely reflected at the interface. Thus the output of the second optical structure is an inversion, and the output of the first optical structure is a level shifted replica, of the optical digital pulse stream.