An ultra-compact Mach-Zehnder (MZ) electro-optic (EO) modulator composed of nanoscale metal gap waveguides has been numerically demonstrated. Propagations of surface plasmon polaritons (SPPs) in nano-size channels and their EO modulations are investigated by the finite difference time domain (FDTD) method considering the Lorentz-Drude (LD) model. The half-wave voltage (V?) of the resulting MZ modulator for push-pull operation is 1.73 V using the interference arm with a sub-micron length (500 nm). © 2009 SPIE.