We present an all-optical modulator realized on a silicon chip. The proposed modulator has nano scale dimensions and a high extinction ratio. Its operation principle is based on a spatially non-uniform variation of the absorption of a miniaturized, silicon waveguide - based Mach-Zehnder interferometer (MZI). The absorption variation is obtained by illuminating the MZI with visible light. Our modulator may be used as an interfacing link between microelectronic processing circuits and optical information transmission links. We provide details on the fabrication and the experimental characterization of the suggested device. Since the operation principle is not based on a high Finesse resonator, the modulator is less sensitive to wavelength changes and its operation rate is not connected to the time required for the optical response to reach steady state but rather to material related effects.