One of the major issues in the networking industry today is tremendous demand for more and more bandwidth. However, with the development of optical networks and the use of Dense Wavelength Division Multiplexing (DWDM) technology, a new and probably, a very crucial milestone is being reached in network evolution. The existing SONET/SDH network architecture is best suited for voice traffic rather than todayâ„¢s high-speed data traffic. To upgrade the system to handle this kind of traffic is very expensive and hence the need for the development of an intelligent all-optical network. Such a network will bring intelligence and scalability to the optical domain by combining the intelligence and functional capability of SONET/SDH, the tremendous bandwidth of DWDM and innovative networking software to spawn a variety of optical transport, switching and management related products. This paper deals with optical network architecture and explains virtual topology along with optical layer and higher layer interface.