Stimulated emission of erbium ions inserted in the matrix of amorphous hydrogenated silicon was first observed under optical pumping. A 'homogeneous' model of lasing in such structure was developed taking into account the saturation of the active medium. It is demonstrated that the generation regime is possible only in the case when the concentration of optically active erbium ions in the medium exceeds some threshold value determined by losses in the resonator. (C) 2001 Elsevier Science B.V. All rights reserved.