Rapid UBVRI photometry of the ultracompact low-mass X-ray binary ( LMXB ) pulsar 4U 1626–67/KZ TrA has detected 130.4 mHz ( 7.67 s ) optical pulsations in all five bands . The optical pulsations , which are at the same frequency as the X-ray pulsations caused by rotation of the highly-magnetized accreting neutron star primary , are understood as reprocessing of the pulsed X-ray emission in the accretion disk or on the surface of the secondary . The optical pulsed fraction is roughly 6 % , independent of wavelength , indicating that the optical emission is dominated by X-ray reprocessing . A weaker ( 1.5 % ) sideband , downshifted 0.395 ( 15 ) mHz from the main optical pulsation , is also present . This is consistent with a previously reported sideband which was downshifted 0.4011 ( 21 ) mHz from the main pulsation , corroborating the 42-min binary period proposed by Middleditch et al . ( 1981 , ApJ , 244 , 1001 ) . A 0.048 Hz optical quasi-periodic oscillation ( QPO ) , corresponding to a previously reported X-ray feature , was also detected in some of the observations , with a fractional RMS amplitude of 3–5 % . This is the first measurement of an optical QPO in an X-ray binary pulsar . I discuss constraints on the nature of the mass donor and show that mass transfer via a radiatively-driven wind is inconsistent with the optical data . I also review the basic theory of X-ray-heated accretion disks and show that such models provide a good fit to the optical photometry . If the effective X-ray albedo of LMXB accretion disks is as high as recently reported ( \eta _ { d } \gtrsim 0.9 ) , then the optical data imply a distance of \sim 8 kpc and an X-ray luminosity of \approx 10 ^ { 37 } erg s ^ { -1 } .