A 1.3 &mgr;m modulator using light‐hole–to‐electron interband Stark shift in the lattice‐matched AlInAs/GaInAs coupled quantum wells (CQWs) is investigated theoretically. The operation of this device is based on the lowest‐energy absorption resonance corresponding to the first light‐hole–to–electron transition (ELh1→Ee1). The resonant nature of this process results in a sharp absorption peak when the incident photon energy is equal to the energy‐level separation. This device utilizes the significant enhancement of the Stark effect on the electronic states and the strong field‐dependence transition dipole moments. Under an applied electric field, the energy spacing betweenELh1andEe1changes due to the Stark shift. The contrast ratio can be improved from 8:1 for the symmetric CQW to as high as 20:1 for the proposed asymmetric CQW structure. These contrast ratios are achieved by varying the applied electric field in the 0–70 kV/cm range. This large variation of optical absorption at 1.3 &mgr;m is obtained both by the enhanced Stark shift and by varying the overlap between the hole and electron envelope wave functions with an applied electric field and Stark effect for the proposed AlInAs/GaInAs CQW system. ©1995 American Institute of Physics.