Conjugated polymers such as polydiacetylenes possess large third-order optical susceptibilities in their transparent gap regions, making them potentially attractive materials for applications in all-optical signal processing. In order to investigate this potential we have developed techniques for fabricating a variety of integrated optical structures such as channel waveguide directional couplers and grating couplers from thin-films of soluble polydiacetylenes. Experiments carried out at wavelengths of 1.06μm and 1.32μm have identified nonlinear transmission and switching phenomena due to both slow thermal nonlinearities and ultrafast (picosecond) electronic nonlinearities in the directional coupler devices. At 1.06μm, the fast electronic component of the device response is dominated by the imaginary part of the nonlinear index, n2, and intensity dependent absorption and apparent switching effects are observed. The large imaginary component of n2 is due to the presence of a two-photon resonance, and a value of 10-3 cm/MW for the two-photon absorption coefficient at this wavelength is observed. In contrast, at 1.32μm the measured two-photon absorption coefficient is smaller by more than a factor of 10, and we find evidence for the onset of switching due to a real n2. These results highlight the important role that two-photon effects play in determining the optimum operating conditions for conjugated polymer-based devices.