We have constructed an efficient source of photon pairs using a waveguide-type nonlinear device and performed a twophoton interference experiment with an unbalanced Michelson interferometer. Parametric down-converted photons from the nonlinear device are detected by two detectors located at the output ports of the interferometer. Because the interferometer is constructed with two optical paths of different length, photons from the shorter path arrive at the detector earlier than those from the longer path. We find that the difference of arrival time and the time window of the coincidence counter are important parameters which determine the boundary between the classical and quantum regime. When the time window of the coincidence counter is smaller than the arrival time difference, fringes of high visibility (80± 10%) were observed. This result is only explained by quantum theory and is clear evidence for quantum entanglement of the interferometer's optical paths.Two-photon entanglement has attracted considerable interest for studying the nonlocal correlations of quantum theory [1][2][3][4], and many experiments have been performed [5][6][7][8][9]. The contradiction of local realism can be realized more clearly with multi-photon entanglement systems [10], which have been demonstrated experimentally in recent years [11]. We can expect these systems to be used for novel applications such as quantum cryptography [12], and quantum teleportation [13].Multi-photon entanglement systems can be generated by parametric down-conversion. Since the probability of generating multi-photon entangled systems decreases exponentially with the number of entangled photons, it becomes more difficult to conduct experiments with a large number of entangled photons [14]. One of the candidates for solving this difficulty is to make the ultrabright source of polarization-entangled photons proposed by Kwiat et al. [15]. The source is superior to other sources because nearly every pair of photons is polarization entangled. Since the total number of generated photon pairs is limited by the nonlinear susceptibility and phase matching condition of a nonlinear crystal, a remarkable increase in the number of photon pairs can not be expected if one uses bulk crystals. This is to be compared to the drastic improvement of the efficiency to generate photon pairs we present. Our method uses a waveguide type nonlinear device originally developed for type-I quasi-phase-matching frequency doubling. Using the newly developed source of photon pairs, we then perform a two-photon interference experiment and show that photon pairs are in the entangled state for interferometer's optical paths. Parametric down-converted photons from the nonlinear device are detected by two detectors located at the output ports of the interferometer. Because this interferometer is constructed with two optical paths of different length, photons from the shorter path arrive at the detector earlier than those from the longer path. When the time window of the coincidence counter is ...

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