This proposal describes a one-year activity in which the PI will conduct an investigation and build a vertical cavity structure, based on AlAs/GaAs multilayers that will allow optical parametric amplification using a transverse pump scheme. The pump wavelength will be at 0.98 micron for amplification at 1.5 micron wavelength, or pumping at 0.75 micron for wavelength conversion. In the proposed research, the dynamic behavior of the amplifier as well as the wavelength converter will be investigated. The design of the optimized structure will be simulated and tested.