4 Fundamentals of Optical Devices systems can now be applied to optical systems such as orthogonal frequency-divi- sion multiplexing (OFDM) and code division multiple access (CDMA). Obvi- ously, the overall system performance is not only determined by the system architecture but also depends on the characteristics of each individual optical device. On the other hand, from an optical testing and characterization point of view, the knowledge of functional optical devices as building blocks and optical signal processing techniques are essential for the design and construction of measurement setup and optical instrumentation. It also helps to understand the capabilities and limitations of optical systems. This chapter introduces fun- damental optical devices that are often used in fiber-optic systems and optical instrumentations. The physics background and basic properties of each optical device will be discussed. Section 1.1 introduces optical sources such as semiconductor lasers and light-emitting diodes (LEDs). Basic properties, including optical power, spec- tral width, and optical modulation will be discussed. Section 1.2 presents optical detectors. Responsitivity, optical and electrical bandwidth, and signal-to-noise- ratio are important characteristics. Section 1.3 reviews the basic properties of optical fibers, which include mode-guiding mechanisms, attenuation, chromatic dispersion, polarization mode dispersion, and nonlinear effects. Section 1.4 discusses optical amplifiers, which include semiconductor optical