A fully "time tunable" all-optical demultiplexer selects which digital bits or groups of bits in an all-optical data packet or all-optical data burst are to be read/demultiplexed. The all-optical demultiplexer is implemented in either a semiconductor hybrid or in a completely monolithic form. The all-optical demultiplexer is formatted in either a "normally on" or "normally off" configuration. Variable time delay elements adjust the time delay of a clocking signal input and a data packet input. The clocking signal determines the state of two nonlinear optical elements, such as semiconductor optical amplifiers, incorporated in the upper and lower arms of a Mach-Zehnder configuration. Only desirable digital bits or groups of bits are outputted from the demultiplexer. All other undesirable bits are suppressed.