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                                                                    EXHIBIT 10.7



                            MRV COMMUNICATIONS, INC.

                             STOCK OPTION AGREEMENT

        This Stock Option Agreement ("Agreement") is made effective as of the
12th day of July, 2000 by and between MRV Communications, Inc. (the "Company")
and Eric I. Blachno (the "Optionee").

                                    RECITALS

        WHEREAS, the Company wishes to retain Optionee as the Vice President of
Finance and Chief Financial Officer of its wholly-owned subsidiary, Luminent,
Inc. ("Luminent");

        WHEREAS, in order to induce Optionee to become an employee of Luminent
it is essential for the Company to grant Optionee an option to purchase shares
of common stock of the Company;

        WHEREAS, Optionee, in consideration of, among other things, the grant of
this option, has accepted the Company's offer of employment on the terms set
forth in that certain Letter Agreement dated July 12, 2000 from Luminent and the
Company to Optionee (the "Letter Agreement").

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
parties hereto agree as follows:

        1. The Option(s). The Optionee may, at his option, purchase all or any
part of an aggregate of 22,000 shares of common stock, $0.0017 par value per
share (the "Common Stock"), of the Company (the "Optioned Shares"), at the price
of $33.4375 per share (the "Option Price"), on the terms and conditions set
forth herein.

        2. Exercise Dates and Exercise. The Option(s) shall be exercisable as to
any or all of the Optioned Shares at any time or from time to time beginning on
the date hereof and ending on July 11, 2005.

        This Option shall be deemed exercised as to the shares to be purchased
when written notice of such exercise has been given to the Company at its
principal business office by the Optionee with respect to the Common Stock to be
purchased. Such notice shall be accompanied or preceded by full payment in cash
or cash equivalents of the Option Price or by a notification in customary form
of Optionee's intended use of a broker-assisted cashless exercise procedure.

        3. Termination of Employment. Notwithstanding the provisions of Section
2, this Option shall be exercisable after a termination of Optionee's employment
with Luminent only at the times, to the extent, and on the terms and conditions
set forth in the Letter Agreement.


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        4. Representations and Warranties; Registration of Shares Underlying
Options. Optionee represents and warrants to the Company as follows:

               (a) He acknowledges that as a condition to the exercise of any
        portion of this Option, the Company may require the Optionee to make any
        representation and/or warranty to the Company as may, in the reasonable
        judgment of counsel to the Company, be required under any applicable law
        or regulation, including but not limited to a representation and
        warranty that the Optioned Shares are being acquired only for investment
        and without any present intention to sell or distribute such shares in
        the absence of effective registration statement or an available
        exemption under the Securities Act of 1933 (the "Act") if , in the
        opinion of counsel for the Company, such a representation is required
        under the Act or any other applicable law, regulation or rule of any
        governmental agency; provided, however, that in accordance with the
        provisions of the Letter Agreement the Company shall use its best
        efforts (including without limitation the timely filing of a
        registration statement under the Act and any registration or
        qualification required by applicable state securities laws) to achieve
        compliance with the Act or such other law, regulation or rule, as
        applicable, without any such representation or warranty by Optionee.

               (b) He is an "accredited investor" as such term is defined in
        Rule 501(a) of Regulation D under the Act.

               (c) He acknowledges that until the Optioned Shares have been
        registered under the Act, the Company will to the extent determined by
        the Company's legal counsel to be required by applicable law affix a
        legend in substantially the following form to the certificates
        evidencing the Optioned Shares:

               The securities represented by this certificate have not been
               registered under the Securities Act of 1933, as amended, and may
               not be sold, pledged, hypothecated, donated, or otherwise
               transferred, whether or not for consideration, unless either the
               securities have been registered under said Act or an exemption
               from such registration requirement is available. If the Shares
               are to be sold or transferred pursuant to an exemption from the
               registration requirement, the Company may require a written
               opinion of counsel, reasonably satisfactory to counsel for
               Company, to the effect that registration is not required.

        The Company shall without charge offer to substitute an unlegended
        certificate for any legended certificate promptly after the Optioned
        Shares represented by such legended certificate first become eligible
        for sale by Optionee pursuant to Rule 144(k) (or any successor
        provision) under the Act.

               (d) Until the Optioned Shares have been registered under the Act,
        prior to any proposed sale, pledge, hypothecation, gift, or other
        transfer, for value or otherwise, of any or all of the Optioned Shares
        or of any interest therein other than a sale in compliance with the
        requirements of Rule 144 under the Act (hereinafter, a "Transfer"),
        Optionee shall give written notice to the Company describing the
        Transfer. Optionee shall not ef-



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        fect any Transfer unless and until (i) the Company receives an opinion
        of Optionee's counsel, in form and substance reasonably acceptable to
        counsel for the Company, that the Transfer may be effected without
        registration under the Act and without registration or qualification
        under applicable state securities laws (provided, however, that no such
        opinion shall be required in connection with any bona fide gift of the
        Optioned Shares to a member of Optionee's immediate family or a
        charitable or educational institution), and (ii) satisfaction of such
        other conditions as may be reasonably required by counsel to the Company
        in order to assure compliance with the Act and with applicable state
        securities laws.

        5. No Enlargement of Rights. Nothing in this Agreement shall be
construed to confer upon the Optionee any right to continued engagement by the
Company or to restrict in any way the right of the Company to terminate its
arrangement with Optionee subject to the terms of the Letter Agreement or any
other applicable agreement between them.

        6. Withholding of Taxes. Optionee authorizes the Company to withhold, in
accordance with any applicable law, from any amounts payable to Optionee any
taxes required to be withheld by federal, state or local law as a result of the
grant of the Option(s) or the issuance of stock pursuant to the exercise of such
Option(s).

        7. Laws Applicable to Construction; Choice of Jurisdiction and Forum.
This Agreement shall be construed and enforced in accordance with the laws of
the State of California, without reference to the conflict of laws provisions of
any jurisdiction. The parties hereby submit to the exclusive jurisdiction of and
venue in the state courts of the State of California or the federal courts
located within or the Central District of California with respect to any
disputes concerning the subject matter of this agreement.

        8. Agreement Binding on Successors. The terms of this Agreement shall be
binding upon the executors, administrators, heirs, successors, transferees and
assignees of the Optionee. The terms of this Agreement shall be binding upon the
successors of the Company.

        9. Necessary Acts. The Optionee agrees to perform all acts and execute
and deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement, including but not limited to all acts and
documents related to compliance with federal and/or state securities laws;
provided, however, that the Company shall use its best efforts to achieve
compliance with such securities laws without any action by Optionee.

        10. Counterparts. For convenience this Agreement may be executed in any
number of identical counterparts, each of which shall be deemed a complete
original in itself and may be introduced in evidence or used for any other
purpose without the production of any other counterparts.

        11. Invalid Provisions. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision was not contained herein.



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        12. Adjustments upon Changes in Capitalization. If the outstanding
shares of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split or other similar event, then an equitable and
proportionate adjustment shall be made in the number or kind of shares which may
be issued upon exercise of the Options granted under this Agreement.

        13. Options Not Transferable. This Option may be exercised during the
lifetime of the Optionee only by the Optionee. The Optionee's rights and
interests under this Agreement and in and to the Option may not be sold,
pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred in
any manner, either voluntarily or involuntarily by operation of law, except by
will or the laws of descent or distribution.

        IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement effective as of the date first written hereinabove.



The Company

MRV COMMUNICATIONS, INC


By  /s/ Noam Lotan
   ----------------------------
        Noam Lotan,
        President & CEO


Optionee


  /s/ Eric I. Blachno
------------------------------
      Eric I. Blachno


MRV Communications, Inc.
20415 Nordhoff Street
Chatsworth, California 91311

Eric I. Blachno

272 - 1C Iven Ave.
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St. Davids, PA 19087
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Social Security No. ###-##-####
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