In this thesis, we propose a potentially inexpensive light source for the mulit-channel wavelength division multiplexing (WDM) system applications. The spectrum-sliced incoherent light source (SILS) is alternative conventional laser source for the WDM system owing to its simplicity and flexibility. However, the spectrum-sliced source suffers from the intensity noise and spontaneous-spontaneous beat noise. Thus, it is necessary to increase the optical bandwidth or decrease the electrical bandwidth (by varying the bit rate ) to improve the signal to noise ratio (SNR). We used the intra-channel four wave mixing (IC-FWM device) before the receiver to suppresses the intensity noise of the light source, thus greatly expands the optical bandwidth of the received signal. We not only demonstrated the capability of an 8 ¡Ñ 2.5 Gb/s, DWDM with 200 GHz channel spacing transmission system by utilizing only one spectrum-sliced source, but also investigate the cross-talk issue of SILS in the fiber Bragg grating-based optical add/drop multiplexer (FBG-based OADM) and the Mach-Zehnder fiber Bragg grating-based optical add/drop multiplexer (MZ FBG-based OADM) systems.