A nonlinear amplifying compound loop mirror (NACLM) constructed by two fiber couplers is presented and analyzed. The analysis shows that the nonlinear reflection characteristics of the NACLM can be adjusted by changing the splitting ratio of the optical fiber couplers. Using the NACLM and a bulk semiconductor saturable absorber, stable passive mode locking in an erbium doped fiber laser can be obtained. Passively mode locked pulses of a repetition rate of 248 MHz has been achieved. It is suggested that using a NACLM as a passive mode locking element, generation of ultrashort pulses of very high repetition rate is promising with a fiber laser.