A design and analysis study is presented for a new optically-triggered (OT) interband resonant-tunneling-diode (I-RTD) device that has potential for generating terahertz (THz) frequency oscillations and achieving enhanced output power levels under pulsed operation. The proposed device utilizes novel nanoscale mechanisms to achieve externally driven oscillations that consist of two phases – i.e., an initial transient phase produced by a natural Zener (interband) tunneling process and a second discharging transient phase induced by optical annihilation of stored hole-charge by externally-injected photon flux. The specific focus of this paper will be on an OT-I-RTD oscillator that utilizes In 1- x Ga x As / GaSb y As 1- y hetero-systems and the application of band-engineering to enable triggering by 1.55 μm laser technology. The paper presents performance results for the hybrid circuit design, along with a practical implementation strategy for integrating the optical triggering and an analysis of the heating induced during large signal operation.