We demonstrate a new waveguide intensity modulator that uses the field‐dependent refractive index change associated with quantum wells to control the lateral confinement of light in a slab waveguide. By operating at photon energies ∼40 meV below the zero field electron–heavy hole transition energy, we show, conclusively, that the field‐induced refractive index change is primarily due to the quantum‐confined Stark effect. Intensity modulators are demonstrated withon/offratios better than 3:1. Devices based on this electrically controllable lateral confinement will play an important role in integrated optics.