9417595 Kazovsky Wavelength-division multiplexing (WDM) is rapidly evolving as a key technology for future optical networks ranging from local area networks (LANs) to wide-area networks (WANs). Third-order fiber nonlinearities (self-phase modulation (SPM), cross-phase modulation (XPM) and four-wave mixing (FWM) set limit on the capacity of WDM networks. We propose to investigate, both theoretically and experimentally, the effect of XPM and FWM produced on one wavelength channel by the others, by investigating the statistics of amplitude and frequency noise produced by these effects. We will quantitatively evaluate penalties imposed by XPM and FWM on measure on system performance, such as bit error rate (BER) and eye closure. We will investigate techniques for minimizing the impact of XPM and FWM by varying optical power, number of wavelengths, channel spacing, modulation frequency and format, dispersion, coding, polarization, and receiver type. Through this investigation, we will develop quantitative models of the impact of XPM and FWM on WDM systems, techniques to minimize this impact, and techniques to achieve optimum system performance consistent with the unavoidable presence of nonlinear effects in such networks. ***