The basic concepts leading to some of the hot carrier driven steady-state and transient second and third-order nonlinear optical processes such as parametric interaction, amplitude modulation demodulation, frequency modulation and stimulated Brillouin scattering in diffusive semiconductors and their applications to parametric oscillator, amplifier and phenomena like optical communication and phase conjugation in presence of magnetostatic field is discussed in detail. These nonlinear processes in diffusive semiconductors are described with emphasis on the physical reason for their occurrence.