Optical parametric amplifiers (PAs) utilize highly efficient nonlinear effects in an optical fiber and they have the ability to operate in phase-sensitive mode. The inclusion of PAs in optical systems can give an ultimate limit for lumped amplified links in terms of achievable signal to noise ratio. The drawback is the complexity stemming from the requirement of phase matching a number of waves at each amplifier, phase lock, and the extra spectrum consumed by idler waves. In this chapter, the theories of a parametric amplifier, including the quantum-optical equations, are given. The properties of the gain saturation and the noise figure are presented. Practical amplifier systems and their applications in phase-sensitive amplification, all-optical signal regeneration, and squeeze state generation are outlined.