We construct an all-optical nonlinear joint transform correlator utilizing the rewritable photochromic diarylethene film, which serves as a joint transform power spectrum recorder. The computer simulations indicate that, with the nonlinear response characteristic of the diarylethene film, the SNR and peak sharpness of the correlator can be improved. A compact correlator prototype with a 5-cm focal length is constructed and the experiment results verify that the physical length can be reduced remarkably owing to the high resolution of the diarylethene film.