Cellular optogenetic tools are engineered protein photoreceptors that allow researchers to probe intricate protein-protein interaction networks with the flip of a light switch. These tools can be turned on with high spatial and temporal resolution to change the activity or localization of a protein inside a cell. In order for a tool to be widely useful it should be generalizable for multiple applications, orthogonal to the system it is used in, and have low levels of activity in the inactive state. Light-inducible heterodimerization is one of the most general optogenetic approaches. Each half of the pair can be fused with any intracellular protein or localization sequence, imparting light induced control over a wide variety of signaling pathways. However, utility of existing light inducible dimers is still limited due to poor dynamic range between active and inactive states or unknown mechanism of action, which can impede analysis. It is the aim of this thesis to design a general cellular optogenetic tool with large dynamic range, usable in eukaryotic systems, and clear mechanism of activity. In order to create a tool fitting these criteria, we have engineered a light inducible heterodimer pair from the SsrA peptide – SspB protein interaction, using the blue light sensitive photoreceptor, LOV2 from Avena sativa. Irradiation of AsLOV2 with blue light induces a conformational change in its C-terminal Jα helix. Our initial incorporation of the SsrA peptide into the Jα helix resulted in a modest change in affinity for SspB with light. Using a protocol of computational library design, phage display screening, and high-throughput binding assays we were able to engineer an improved light-inducible dimer system, iLID, that exhibits over 50-fold increase in affinity for its partner upon irradiation with blue light. The iLID system comes with two partners, SspB nano and SspB micro, which enables researchers to induce interactions in the nanomolar or micromolar ranges. We have further showed that both iLID pairs can be used to reversibly co-localize proteins of interest in mammalian cells and control small GTPase signaling. Despite their proposed modularity, successful control of in cell activity depends on compatibility between characteristics of the chosen heterodimer pair and its application. To examine the in vivo functional significance of in vitro characteristics for light-inducible dimer pairs, we measured in vitro affinities and kinetics, light induced gene transcription in S. cerevisiae, and lamellipodia protrusion in mammalian cell culture. The results demonstrate a correlation between affinity, kinetics, and dynamic range with cellular activity and highlight the need for thorough benchmarking. This work has yielded valuable insight on how to select optogenetic tools appropriate for specific applications and generated two powerful optogenetic heterodimer pairs, iLID nano and micro, available for use in cell biology.