Pulsed-and continuous-wave type-I and type-II difference-frequency generations (DFGs) in monolithic AlGaAs Bragg reflection waveguides were comparatively investigated. Phase matching bandwidth of exceeding 40 nm was observed in all the processes. Highest difference-frequency (DF) power of 2.45 nW was obtained in continuous-wave type-II interaction with the average external pump and signal powers of 62.9 and 2.9 mW, respectively. The corresponding nonlinear conversion efficiency is about 1.3ϫ 10 −3 % W −1 for a sample with a length of 1.5 mm. Using split-step Fourier method, the impacts of third-order nonlinearities including twophoton absorption and self-phase modulation on the efficiency of the DFG are numerically investigated. Furthermore, the adverse effects of group velocity mismatch and group velocity dispersion of the interacting frequencies on the efficiency of the pulsed nonlinear process are theoretically studied. Simulations indicate that the dominant factors in limiting the efficiency of the pulsed interaction are group velocity mismatch between pump and DF signal and two-photon absorption of the interacting waves.