-We demonstrate that the interaction of loop and nonlinear Fano resonances results in a formation of hybrid resonant states in Mach-Zehnder type interferometers, providing with opportunities for an advanced phase manipulation. The nonlinear response of such structures can be greatly enhanced, leading to a low threshold 100% switching operation. We further propose one of the possible realizations based on nonlinear photonic crystal circuits, suitable for optimal all-optical switching.Introduction. -Mach-Zehnder interferometer (MZI) is a key component in many branches of physics because of its ability to manipulate a coherent signal [1]. By coupling a resonator to the MZI can further increase the phase sensitivity of the coherent manipulation [2,3]. The enhanced all-optical switching [2] and the bistability [4] have been demonstrated in a coupled ring-resonator Mach-Zehnder interferometer, which provides the possibility for the effective and coherent control by using a nonlinear resonator.Recently, we have introduced the concept of MachZehnder-Fano interferometer (MZFI) [5] providing with unique physical property that can not be found in a macroscopic resonator enhanced MZI [2][3][4]6]. The MZFI allows us to manipulate the interaction of different types of resonances which leads to the formation of a novel hybrid Fano-like resonant states [7]. Furthermore, the counterpart of the ring-resonator-coupled Mach-Zehnder interferometer in the microscopic scale, i.e. MZFI based on a photonics crystal (PhC) platform seems to be more promising for future application owing to small volume compared with the macroscopic resonators. Recent advantages in PhCs fabrication technology [8], allow us to achieve ultra high-Q cavities facilitating low threshold nonlinear bistability [9][10][11][12][13]. Indeed, the manifested optical bistable state is the nonlinear Fano resonance [15]. As a result, the sys-