A kind of all-optical switch, which is constructed by a nonlinear amplifying loop mirror (NALM) based on erbium-doped fiber amplifier (EDFA) and high nonlinear dispersion shifted fiber (HNL-DSF), is presented. With the high gain coefficient of EDFA and the optical Kerr effect of HNL-DSF, this configuration can be used to shape the optical pulse and suppress the pedestal and noise. The effect of group velocity dispersion (GVD) of HNL-DSF on the switch characteristics of NALM is analyzed by split-step Fourier method. Meanwhile, the effects of the gain coefficient, the saturation of EDFA and the coupling ratio of optical coupler are discussed theoretically and numerically. NALM has intensity-dependent filtering character and the input power required to obtain nonlinear input-output relationship reduces to a low level. Through optimizing every parameter, a switching operation over 1 Tbit/s can be realized on the short pulse and the threshold value of the switch can be lower than 1 mW.