Due to continued growth of the Internet and the introduction of new broadband services, such as video-on-demand and mobile telephony, there is a constant requirement for higher speed communications. It is expected that next generation optical communications systems will evolve towards higher capacities by increasing individual line rates rather than the number of wavelength channels. To implement these high-speed optical networks operating at individual channel rates above 100 Gb/s, all-optical processing techniques are necessary. A novel approach based on two photon absorption nonlinearity within a resonance cavity enhanced structure is explored within this thesis. High-speed transmission is severely limited by optical impairments requiring frequent and expensive signal regeneration. Chromatic dispersion, considered as one of the main limiting factors, has to be mitigated in order to achieve satisfactory system performance. Continuous monitoring and adaptive compensation of accumulated dispersion fluctuations within a transmission line is likely to be necessary in future systems. Asynchronous all-optical nonlinear techniques can be utilized for high-speed signal temporal characterization and monitoring without the necessity of timing extraction, or optical to electrical conversion. Two-photon absorption within a resonant microcavity is an ideal candidate for high-speed transmission line performance monitoring, and can be easily integrated with a dispersion compensation module. The major advantage of using a microcavity structure is that the signal is only enhanced over a narrow wavelength range, which is defined by the structure and design of the micro-cavity. In addition, by varying the angle of the incident signal, the resonance response peak of the device can be tuned, thereby isolating individual wavelength channels without the need for external optical filtering. The novelty of this work lies in the ability of using a single photodetector for sequential monitoring of different wavelength channels, operating at line rates exceeding conventional electrical processing-speeds limits. Experimental work included characterization and testing of the fabricated TPA micro-cavities for 160 Gb/s OTDM chromatic dispersion monitoring. A theoretical model explaining the cavity influence on the nonlinear detection is introduced. The main attribute of this work is the experimental investigation of the performance TPA based micro-cavities laboratory prototype, in a multi-wavelength high-speed optical system. The results have demonstrated the applicability of the TPA micro-cavity to monitor accumulated dispersion fluctuations in future high speed optical networks.