Gives a broad description of optical bistability: from practical applications, as an optical transistor or optical memory element, to its phase transition interpretation. The theory is divided into three parts. The first is a simple discussion that covers most of the basic experimental effects and concepts of practical importance. The second part applies to atomic system where a semiclassical as well as a quantum-mechanical approach is possible. The third one discusses the mechanisms compatible with large nonlinearities observed in InSb and GaAs as semiconductors constitute the most promising materials for applications. Current experimental progress in all-optical and hybrid devices is also discussed and scaling example is presented to indicate the possibilities in high-speed all-optical signal processing.