We propose a mechanism for achieving optical bistability in semiconduc
tor heterostructures. In contrast to the well-known refractive shift o
f the Fabry-Perot mode in macroscopic resonators, we consider the blea
ching of the exciton Rabi splitting in strong-coupling microcavities a
nd prove that this nonlinear process leads to an optically bistable be
havior. Through a model based on the transfer-matrix formalism, we pre
dict the dependence of this effect on specific material parameters and
on the nature of the cavity. Numerical calculations are carried out f
or quantum well embedded cavities and the possibility of room-temperat
ure bistable operation is also discussed.