In this paper we propose a method to analyze the nonlinear behavior of an integrated-mirror etalon by the characteristic matrix method. If the dependence of the refractive index and the absorption coefficient upon the light intensity are known, we can couple this with an equation by which we can evaluate the light intensity distribution inside an etalon for the given values of the refractive index and the absorption coefficient. By solving these coupled equations by the iteration method, we evaluate the transmission characteristics of a nonlinear integrated-mirror etalon. By the characteristic matrix method, we have demonstrated the static and dynamic bistable behavior of a nonlinear integrated-mirror etalon.