A technique of impurity‐free vacancy‐induced disordering of GaAs/AlGaAs multiquantum wells (MQW) that is area selective, very reliable, and highly reproducible, has been developed. The localized compositional disordering is induced by rapid thermal annealing of the sample after it has been coated with a thin film of ‘‘spin‐on’’ glass and prebaked at 400 °C in a high purity nitrogen:oxygen (78:22) atmosphere. In order to self‐consistently determine the diffusion coefficient of the Al and Ga atoms, the photoluminescence peak is fitted to then=1 electron to heavy hole transition that corresponds to an error function potential profile caused by the diffusion. The process has been used to integrate two optical devices on a MQW structure. One is a nonlinear directional coupler all‐optical switch, and the other is an integrated Mach–Zehnder all‐optical modulator. The switching characteristics of the devices were measured using the conventional pump‐probe measurement technique. ©1996 American Institute of Physics.