There are many two-by-two matrices in layer optics. It is shown that they c
an be formulated in terms of a three-parameter group whose algebraic proper
ty is the same as the group of Lorentz transformations in a space with two
spacelike and one timelike dimensions, or the Sp(2) group which is a standa
rd theoretical tool in optics. Among the interesting mathematical propertie
s of this group, the Iwasawa decomposition drastically simplifies the matri
x algebra under certain conditions, and leads to a concise expression for t
he S matrix for transmitted and reflected waves. It is shown that the Iwasa
wa. effect can be observed in multilayer optics, and a sample calculation o
f the S matrix is given.