A photonic-crystal fiber provides dispersion compensation in a soliton fiber laser. The anomalous dispersion provided by the photonic-crystal fiber permits construction of a femtosecond fiber laser at 1 .mu.m wavelength without prisms or diffraction gratings. The laser produces .about.100-fs pulses with 1 nJ energy, and is a major step toward environmentally-stable all-fiber devices at 1 .mu.m.