Soon after the nonlinear effects in optical fibers were observed experimentally, it was realized that they would limit the performance of fiber-optic communication systems [1]. However, nonlinear effects were found to be mostly irrelevant for system design in the 1980s because both the bit rate and link lengths were limited by fiber losses and group-velocity dispersion (GVD). The situation changed dramatically during the 1990s with the advent of optical amplification, dispersion management, and wavelength-division multiplexing (WDM). These advances increased link lengths to beyond 1000 km and single-channel bit rates to beyond 10 Gb/s. As a result, the nonlinear effects in optical fibers became of paramount concern for optimizing a lightwave system [2]- [5]. This chapter focuses on how the nonlinear effects influence the design of WDM lightwave systems. The loss-and dispersion-management techniques are discussed first in Section 7.1 as an introduction to system-related issues. Section 7.2 is then devoted to the impact of five major nonlinear effects stimulated Brillouin and Raman scattering (SBS and SRS), self-and cross-phase modulation (SPM and XPM), and four-wave mixing (FWM). Section 7.3 focuses on optical solitons that employ SPM to advantage and can be used for designing WDM systems. Section 7.4 describes intrachannel nonlinear effects that become important for high-speed channels in pseudo-linear lightwave systems.