Abstract.A hybrid subcarrier multiplexing (SCM) technique incorporating spectral amplitude coding and optical code division multiple access (SAC-OCDMA) technologies is investigated using both numerical and simulation methods. The hybrid SCM/SAC-OCDMA system combines the two above schemes in such a way that it is robust to multiple access interference and reveals much enhanced channel data rate. We improve the overall performance of the hybrid SCM/SAC-OCDMA system based on spectral amplitude coding to suppress a number of impairments and improve its sensitivity at a bit error rate of 10 -9 . As a result, the system suggested by us, which is based on a dynamic cyclic shift code, shows better performance when compared with the standard SAC-OCDMA systems employing the conventional code.Keywords: dynamic cyclic shift code, spectral amplitude coding -optical code division multiple access systems, phase induced intensity noise, modified quadratic congruence code, random diagonal code.