USING CHAOS TO ENCODE AND DECODE MESSAGES has been demonstrated in an all-optical system for the first time by Rajarshi Roy (404-894-5201) and colleagues at Georgia Tech. In 1994, Roy and co-workers showed that it is possible to synchronize two lasers even if their signals are chaotic, in which small differences in their starting conditions lead to outputs which quickly become unpredictable. (Update 170) In the present experiment, the researchers amplified an optical "message signal" (consisting of a square wave) in an erbium- doped fiber amplifier (EDFA) and combined it with a chaotic signal from an erbium-based laser. Transmitted by means of an optical fiber, the combined signal entered a second, nearly identical EDFA, which produced chaotic fluctuations synchronized with the first. Subtracting out this chaotic signal allowed them to recover the original message. (Science, 20 February 1998; see also Georgia Tech press release). Researchers at UC-San Diego and Cornell (Henry Abarbanel, UCSD, 619-534-5590) have shown that this technique can work even if the signal travels through a noisy communications channel. (Abarbanel et al., upcoming article in Physical Review Letters.)