In regard to the beam propagation method (BPM), one of the indispensable analysis tools for the design of optical waveguide devices and optical circuits, this paper treats the FE-BPM based on the finite element method, which allows an efficient analysis using adaptive meshes and provides basic concepts. The paper also refers to the time-domain BPM, which can automatically take care of the reflected wave, and to the imaginary-distance BPM, which can easily carry out eigenmode analysis including leaky modes. In addition to examples of generated adaptive meshes, analysis examples of photonic crystal circuits and three-dimensional ARROW waveguides are presented so that the effectiveness and usefulness of the FE-BPM are demonstrated. (C) 2002 Wiley Periodicals, Inc.