Recently there is an increasing interest in applying time-division multiplexed (TDM) techniques for optical networks to utilize efficiently the bandwidth of optical fibers. To overcome the speed limitation of electronic devices used in optical TDM techniques, all-optical counterparts are required. The work in this thesis addresses alloptical routers for TDM optical networks. The core of the optical routers is the demultiplexer.Two types of all-optical routers are analyzed and simulated. The first type is based on a TDM demultiplexer employing nonlinear optical loop mirror (NOLM). The second type uses a semiconductor optical amplifier (SOA) based demultiplexer. Expressions are derived for the transmission and reflection coefficients for the loop mirror employed in both demultiplexers. The effect of various system impairments, on the performance of the demultiplexers, such normal mode loss, control power, and losses, are addressed in details. Simulation results were carried out using MATLAB 6.5 software. The results indicate clearly that the demultiplexer should be designed precisely to achieve the required router performance.