A 40 Gbit/s electroabsorption modulator driven by a peak-to-peak voltage as low as 0.79 V has been successfully fabricated. This device showed a 3 dB E/O bandwidth of 46 GHz and a return loss of below -10 dB even at 50 GHz. These excellent characteristics were achieved by employing strain-compensated lnGaA1As/lnA1As multiquanturn-well (MQW) layers with excellent extinction characteristics and by maximising the 3 dB bandwidth, which was achieved by reducing MQW core width and using a polyimide-buried device structure with a low-loss microwave feed line.