Magneto-optical (MO) storage combines two technologies to give a storage medium that has high data densities, durability, and quick data transfers.  MO drives write magnetically (with thermal assist) and read optically.

Magnet materials have a physical property called a Curie temperature above which they lose magnetization due to the complete disordering of their magnetic domains.  The magnet's coercivity, which is its resistance to magnetization by an outside magnetic force, decreases as the the temperature approaches the Curie point, and is zero thereafter.   To record data in a magneto optical device, a laser heats up the media, decreasing the media's coercivity to a level that allows its magnetism to be modified by a relatively weak magnetic field.  Once the data is written, the area then cools, and the magnetic data is not subject to modification or erasure by magnetic forces encountered during our daily routine.
 

Diagram of a write in an MO drive

To read the data from the MO media, the drive not not use magnetic current induced in the heads by the changing magnetic flux on the disk, as a hard drive does, but instead takes advantage of the Kerr effect.  Because of the Kerr effect, the polarization of light will change when it is shined upon an area of the disk that is magnetized. Shining a beam of polarized light on a magnetized surface causes the polarization of the light to shift slightly (usually less than 0.5^o).  If the magnetization is reversed, then the angle of change in polarization (the Kerr angle) is changed as well.  The change in direction of magnetization can be viewed as ones and zeros, making MO convenient for data storage.
 
 

Typical Structure of an MO disc

As can be seen, the structure of MO media is in some ways similar to that of CD-RW media.  But instead of changing the refractivity of the media when it is heated, an MO drive changed the magnetic flux of a small area of the disk.