A technique of sending signals of several different wavelengths of Light into the Fiber simultaneously. In fiber optic communications, wavelength-division Multiplexing (WDM) is a technology which multiplexes multiple optical carrier signals on a single Optical Fiber by using different wavelengths (colors) of Laser light to carry different signals. This allows for a multiplication in capacity, in addition to making it possible to perform Bidirectional communications over one strand of fiber.

The true potential of optical fiber is fully exploited when multiple beams of light at different frequencies are transmitted on the SAME fiber. This is a form of Frequency division multiplexing (FDM) but is commonly called Wavelength division multiplexing. The term wavelength-division multiplexing is commonly applied to an optical carrier (which is typically described by its wavelength), whereas frequency-division multiplexing typically applies to a radio carrier (which is more often described by frequency). However, since wavelength and frequency are inversely proportional, and since radio and light are both forms of electromagnetic radiation, the two terms are equal.

The WDM channels are separated in wavelength to avoid cross-talk when they are (de)multiplexed by a non-ideal optical fiber. The wavelengths can be individually routed through a Network or individually recovered by wavelength-selective components. WDM allows US to use much of the fiber bandwidth, although various device, system, and network issues will limit the utilization of the full fiber bandwidth. Note that each WDM Channel may contain a set of even slower time-multiplexed channels.

WDM is similar to frequency-division multiplexing (FDM). But instead of taking place at radio frequencies (RF), WDM is done in the IR portion of the electromagnetic (EM) spectrum. Each IR channel carries several RF signals combined by means of FDM or time-division multiplexing (TDM). Each multiplexed IR channel is separated, or demultiplexed, into the original signals at the destination. Using FDM or TDM in each IR channel in combination with WDM of several IR channels, Data in different formats and at different speeds can be transmitted simultaneously on a single fiber.

In early WDM systems, there were two IR channels per fiber. At the destination, the IR channels were demultiplexed by a dichroic (two-wavelength) Filter with a Cutoff Wavelength approximately midway between the wavelengths of the two channels. It soon became clear that more than two multiplexed IR channels could be demultiplexed using cascaded dichroic filters, giving rise to coarse wavelength-division multiplexing (CWDM) and dense wavelength-division multiplexing (DWDM). In CWDM, there are usually eight different IR channels, but there can be up to 18. In DWDM, there can be dozens. Because each IR channel carries its own set of multiplexed RF signals, it is theoretically possible to transmit combined data on a single fiber at a total effective speed of several hundred gigabits per second (Gbps).

The use of WDM can multiply the effective Bandwidth of a fiber optic communications System by a large factor. But its cost must be weighed against the alternative of using multiple fibers bundled into a cable. A fiber optic Repeater device called the Erbium amplifier promises to make WDM a cost-effective long-term solution to the bandwidth exhaustion problem.