Abstract-A theoretical study of short period AlGaAs-GaAs diffused quantum-well (QW) absorption modulators operated by using surface acoustic waves (SAW's) is carried out in this paper. The as-grown QW structure is optimized and interdiffusion is used to fine tune the modulation performance. The results show that a stack of QW's can be developed at the top surface of the modulator to utilize the steep potential induced by SAW's. The optimized structure can also produce a large absorption change and thus a fast modulation speed for the same modulation depth. In comparison to previous results, the required surface acoustic wave has a longer wavelength and a lower power so that the fabrication of the interdigital transducer can be simplified. In addition, the use of interdiffusion can provide an useful fine adjustment to the operating wavelength, further enhancement of the modulation depth and an improvement in chirping with the only drawback of an increased absorption loss.Index Terms-Diffused quantum well, electroabsorption modulation, modification of quantum well, surface-acoustic-wave modulator.