Imagine a world where lightning speed Internet is as common as telephones today. Imagine when light, the fastest moving thing in the universe, is the signal-carrying transport medium. Imagine when bandwidth no more remains a constraint for any application. Imagine when imagination is the only limit! This all can be made possible with only one technology and that is optical communication. Optical networks have thus far provided a realization to a greater extent to the unlimited bandwidth dreams of this era, but as the demands are increasing, the electro-optic conversions seem to become bottlenecks in blended optical networks. The only answer to this is a complete migration to `All-Optical Networks\u27 (AONs) which promise an end-to-end optical transmission. This thesis will investigate various aspects of all-optical networks and prove that AONs perform better than currently existing electro-optical networks. In today\u27s\u27 electro-optical networks, routing and switching is performed in electronic domain. Performance analysis of electro-optical and all-optical networks would include node utilization, link utilization and percentage of traffic routed. It will be shown through Opnet Transport Planner simulations that AONs work better under various traffic conditions. The coming decade will see a great boom in demands on telecommunications networks. The development in bandwidth-hungry applications like real-time video transmission, telemedicine, distance learning and video on demand require both an unlimited amount of bandwidth and dependable QoS. It is well understood that electrically switched networks and copper cables will not be able to meet the future network demands effectively. The world has already agreed to move towards optical communication techniques through the introduction of fiber in access parts of the networks replacing copper. Now the race is to bring optics in higher layers of OSI reference model. Optical communication is on the horizon, and new discoveries are still underway to add to the value of available bandwidth through this technology. My research thesis will primarily focus on the design, architecture and network properties of AONs and challenges being faced by AONs in commercial deployment. Optical components required in AONs will be explored. A comparison between AONs and electro-optical networks will also be shown through optical transport planner simulations