Optical bistability is a phenomenon that arises in the transmission of light by an optical cavity filled with a medium which presents saturable absorption or nonlinear dispersion. From the theoretical viewpoint, optical bistability is a remarkable example of cooperative behaviour in an open system driven far from thermal equilibrium. From the practical viewpoint, optical bistability offers the possibility of realizing memory elements that may perhaps be used to construct an optical computer. We illustrate the basic physical principles of optical bistability at steady state, and the main features of the transient behaviour. The role and the effects of fluctuations (noise) are described in general.