  It is well known that light quanta (photons) can interact with each other in
nonlinear media, much like massive particles do, but in practice these
interactions are usually very weak. Here we describe a novel approach to
realize strong nonlinear interactions at the single-photon level. Our method
makes use of recently demonstrated efficient coupling between individual
optical emitters and tightly confined, propagating surface plasmon excitations
on conducting nanowires. We show that this system can act as a nonlinear
two-photon switch for incident photons propagating along the nanowire, which
can be coherently controlled using quantum optical techniques. As a novel
application, we discuss how the interaction can be tailored to create a
single-photon transistor, where the presence or absence of a single incident
photon in a ``gate'' field is sufficient to completely control the propagation
of subsequent ``signal'' photons.
