Abstract-The performance of high-speed digital fiber-optic transmission using subcarrier multiplexing (SCM) is investigated both analytically and numerically. In order to reduce the impact of fiber chromatic dispersion and increase bandwidth efficiency, optical single-sideband (OSSB) modulation was used. Because frequency spacing between adjacent subcarriers can be much narrower than in a conventional DWDM system, nonlinear crosstalk must be considered. Although chromatic dispersion is not a limiting factor in SCM systems because the data rate at each subcarrier is low, polarization mode dispersion (PMD) has a big impact on the system performance if radiofrequency (RF) phase detection is used in the receiver. In order to optimize the system performance, tradeoffs must be made between data rate per subcarrier, levels of modulation, channel spacing between subcarriers, optical power, and modulation indexes. A 10-Gb/s SCM test bed has been set up in which 4 2.5 Gb/s data streams are combined into one wavelength that occupies a 20-GHz optical bandwidth. OSSB modulation is used in the experiment. The measured results agree well with the analytical prediction.