An exemplary optical isolator, such as a magnetic-semiconductor composite optical isolator, and method for making the same, is provided that includes a semiconductor waveguide and a magnetic-semiconductor composite layer. The semiconductor waveguide includes a guide layer, a first clad layer and a second clad layer. The guide layer includes one or more layers with a first end, a second end, a top, and a bottom, the guide layer allows a light wave incident the first end of the guide layer to propagate in a positive propagation direction, and allows a light wave incident the second end of the guide layer to propagate in a negative propagation direction. The first clad layer and the second clad layer are provided, respectively, relative to the bottom and the top of the guide layer, and the second clad layer has a thickness to allow an optical field penetration through the second clad layer. The magnetic-semiconductor composite layer is provided in the presence of a magnetic field oriented in a desired direction and is positioned relative the second clad layer and at a thickness and index of refraction to receive the optical field penetration through the second clad layer and to attenuate a light wave that propagates in the negative propagation direction more than the attenuation of a light wave that propagates in the positive propagation direction. The magnetic-semiconductor composite optical isolator may be integrated with a semiconductor laser, such as on the same semiconductor substrate.