A highly nonlinear composite fiber, which has a 1.5 microm chalcogenide glass core surrounded by a tellurite glass microstructure cladding, has been fabricated by the method of stack and draw. A tellurite glass capillary containing a As(2)S(3) rod was sealed with negative pressure inside. Then this capillary and other empty capillaries were stacked into a tellurite glass tube, and elongated into a cane. This cane was then inserted into another tellurite glass jacket tube and drawn into the composite microstructure fiber. The fiber has a flattened chromatic dispersion together with a zero dispersion wavelength located in the near infrared range. The propagation losses at 1.55 microm were 18.3 dB/m. The nonlinear coefficient at 1.55 microm was 9.3 m(-1)W(-1). Such a high nonlinear coefficient counteracts the high propagation losses to a large extent. A supercontinuum spectrum of 20-dB bandwidth covering 800-2400 nm was generated by this composite microstructure fiber.