AbstractAn optical bistable device can be useful not only for optical memory but also for optical sensing by using its binary signal process characteristics. In this case, if a nonlinear Faraday medium is used in the optical bistable device, some interesting features can be obtained as already shown by the present author. Those unique characteristics are that, by controlling the polarization direction by an external magnetic field, a multiple interference can also be controlled not only by the phase associated with an optical path variation but also the polarization direction.This paper describes a theoretical analysis of the fluctuation of transmission and reflection as a function of an absorption in a medium besides the incident intensity reduction and discusses the bistability characteristics and the threshold values against the parameters. It is shown that the control of the bistable function, the realization of a low threshold value, and the increase of a discontinuous power variation ratio (= optical intensity ratio betweenonandoffin the binary signal process) at the threshold value are accomplished as the result of the introduction of the external magnetic field control method. Therefore, it can be concluded that a Faraday medium is very useful for an optical bistable device.