The authors show that the incorporation of gain media in only a selected device area can annul the effect of material loss, and enhance the performance of loss-limited plasmonic devices. In addition, they demonstrate that optical gain provides a mechanism for on/off switching in metal-dielectric-metal (MDM) plasmonic waveguides. The proposed gain-assisted plasmonic switch consists of a subwavelength MDM plasmonic waveguide side-coupled to a cavity filled with semiconductor material. In the absence of optical gain in the semiconductor material filling the cavity, an incident optical wave in the plasmonic waveguide remains essentially undisturbed by the presence of the cavity. Thus, there is almost complete transmission of the incident optical wave through the plasmonic waveguide. In contrast, in the presence of optical gain in the semiconductor material filling the cavity, the incident optical wave is completely reflected. They show that the principle of operation of such gain-assisted plasmonic devices can be explained using a temporal coupled-mode theory. They also show that the required gain coefficients are within the limits of currently available semiconductor-based optical gain media.