A theory of degenerate four-wave mixing in a semiconductor optical cav
ity with quantum wells is constructed. The nonlinear response of a mic
rocavity can be four to five orders of magnitude stronger than that of
an isolated quantum well. For P(2)E- and P-3-type nonlinearities the
damped diffracted signal oscillates with a period determined by the Ra
bi splitting. For a biexcitonic mechanism of nonlinearity, the signal
contains damped overtones of the Rabi splitting and the biexciton bind
ing energy. (C) 1996 American Institute of Physics.