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Optical interconnects are becoming ubiquitous for short-range communication within boards and racks due to higher communication bandwidth at lower power dissipation when compared to metallic interconnects. Efficient multiplexing techniques (wavelengths, time, and space) allow bandwidths to scale; static or predetermined resource allocation of wavelengths can be detrimental to network performance for nonuniform (adversial) workloads. Dynamic bandwidth reallocation (DBR) based on actual traffic pattern can lead to improved network performance by utilizing idle resources. While DBR techniques can alleviate interconnection bottlenecks, power consumption also increases considerably with increase in bit rate and channels. In this paper, we propose to improve the performance of optical interconnects using DBR techniques and simultaneously optimize the power consumption using dynamic power management (DPM) techniques. DBR reallocates idle channels to busy channels (wavelengths) for improving throughput, and DPM regulates the bit rates and supply voltages for the individual channels. A reconfigurable optoelectronic architecture and a performance adaptive algorithm for implementing DBR and DPM are proposed in this paper. Our proposed reconfiguration algorithm achieves a significant reduction in power consumption and considerable improvement in throughput, with a marginal increase in latency for synthetic and real (Splash-2) traffic traces.