A reversible optical isolator and optical amplifier based on the optical isolator. The reversible isolator is constructed from a Faraday rotator having a magnetic field direction that is determined by a control signal applied thereto. The Faraday rotator is sandwiched between first and second polarization filters. The polarization filters may be constructed from polarization splitters in series with half-wave plates. The allowed direction of propagation of an optical signal through the reversible optical amplifier is determined by the magnetic field direction in the Faraday rotator. An optical amplifier according to the present invention includes an optical gain element in series with one or two reversible optical isolators.