A nonlinear fiber having a third-order nonlinear coefficient of at least 30 W.sup.-1km.sup.-1, and its cladding containing Er or Tm at a portion within 3 .mu.m from the interface with its core. A wavelength conversion method of making a signal light having a wavelength .lamda..sub.S and an intensity I.sub.S and a pump light having a wavelength .lamda..sub.P which is shorter than 2.lamda..sub.S and an intensity higher than I.sub.S enter a nonlinear fiber 1, and generating a converted light having a wavelength .lamda..sub.C of .lamda..sub.S.lamda..sub.P/(2.lamda..sub.S-.lamda..sub.P) and an intensity I.sub.C by four wave mixing, wherein Er or Tm is present in the cladding at a portion with a diameter in the nonlinear fiber 1 of at most the mode field diameter, and the converted light is generated by four wave mixing while Er or Tm is excited by an excitation light.