Optical shuffle-exchange networks (SENs) have wide application in different kinds of interconnection networks. This article proposes an approach to construct modular optical SENs, using a set of arrayed waveguide gratings (AWGs) and tunable wavelength converters (TWCs). According to the wavelength routing property of AWGs, we demonstrate for the first time that an AWG is functionally equivalent to a classical shuffle network by nature. Based on this result, we devise a systematic method to design a large-scale wavelength-division-multiplexing (WDM) shuffle network using a set of small-size AWGs associated with the same wavelength set. Combining the AWG-based WDM shuffle networks and the TWCs with small conversion range, we finally obtain an AWG-based WDM SEN, which not only is scalable in several ways, but also can achieve 100% utilization when the input wavelength channels are all busy. We also study the routing and wavelength assignment (RWA) problem of the AWG-based WDM SEN, and prove that the self-routing property and the nonblocking routing conditions of classical SENs are preserved in such AWG-based WDM SEN.