A new idea of using change in index of refraction to suppress gain variation in a saturated semiconductor optical amplifier (SOA) is presented. This kind of gain compensation has the advantage of high speed because it involves two phenomena that always accompany each other. This compensation can be achieved with a nonsymmetrical Mach-Zehnder interferometer structure. Calculated results show that with this structure the input and output power of the SOA can be extended to nearly 10 dB from the former small-signal limit when less than 1-dB gain variation is permitted. Numerical simulations with an advanced dynamic model of the SOA agree with the calculated results.