Taking into consideration the phase match condition, which is dependent on the intensity of the pumping light, the wavelength of the signal light is set on the longer wavelength side than the zero dispersion wavelength of the fiber and the small-diameter fiber with which the dispersion slope can be made small is used. It is seen that by means of these provisions high-efficiency wavelength conversion becomes possible with a converted-light gain of more than 5 dB in the wide pumping wavelength region of more than 8 nm. Since the power density can be made large with a small pumping energy in this small-diameter fiber, high-efficiency wavelength conversion becomes possible. Also, when this fiber is used and the pumping light is set at a longer wavelength than the zero dispersion wavelength, the four-wave mixing efficiency quickly increases with the increase of the pumping light intensity. Because of this characteristic, pulse compression with a gain for the signal optical pulse can be carried out. In experiments, a light signal with a pulse width of 93 ps is compressed to 20 ps and a 29-dB gain is observed. It is also shown that in this case a similar compression is possible for the converted light.