One of the most fundamental challenges to the creation of on-chip, large-scale integrated optics has been to provide signal isolation and to suppress parasitic reflections between devices. In this context, there is a very strong interest in the miniaturization of non-reciprocal optical devices and their on-chip integration1). Due to the weakness of magneto-optical effects, conventional devices require a long propagation distance and occupy a large footprint. Thus, it should be very fruitful to explore the enhancement of magnetooptical effects in photonic crystals2), for the purpose of creating ultra-compact devices with enhanced functionalities. From a fundamental point of view, the key feature of non-reciprocal photonic crystals is the violation of time-reversal symmetry and reciprocity. As a result, the band structures3) and the transport properties of photons exhibit characteristics that are completely different from conventional reciprocal systems. Formulating the basic theoretical framework, and developing the mathematical techniques and simulation algorithms for such systems, are therefore of fundamental importance in order to understand this new class of photonic crystal structures. In this paper we review some of our recent works on both the analytic theory, and detailed numerical design of an ultra-compact optical isolator using cavities in two-dimensional magneto-optical photonic crystals4),5). Such a component is important for on-chip optical isolation. Using this example, we also seek to highlight some of the general aspects of modal properties in magneto-optical photonic crystal systems.