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Bistable characteristics and all-optical set-reset operations in 1.55-μm two-segment InGaAsP-InP strained multiquantum-well (MQW) DFB lasers were studied. An extinction ratio as high as 20 dB with a lasing output power of 4 mW was obtained, partially due to the dispersion effect of strained MQW DFB structures. The detailed transient dynamics of the optical set-reset operations were observed for the first time, with optical injection from a single-mode laser, implying a potential for high-speed applications. A switch-on time in subnanosecond region and a switch-off time of 2.5 ns were measured using input pulses with a peak power of 500 μW.