A new interference cancellation technique for direct-detection optical codedivision multiple-access (OCDMA) network employing pulse-position modulation (PPM) is proposed in this paper. The multiple access interference (MAI) estimation is achieved by pre-reserving one of optical spreading code sequences at the receiver based on the correlation property of padded modified prime codes (PMPC). The estimated interference is then cancelled out after photo-detection process. Additionally, the transmitted signal is Manchester-coded to further improve the system performance. Based on this proposed interference canceller in a shot-noise limited regime, we have obtained an expression for the upper bound of the bit-error probability (BEP) taking into account effects of both MAI and shotnoise. This BEP is compared with that of a PPM-OCDMA without cancellation. Finally, the receiver structure of the proposed optical network unit (ONU) is fairly simple to compare with the conventional cancellation schemes.