Abstract-Orthogonal frequency division multiplexing (OFD-M) is attracting increasing attention in optical communication systems thanks to the inherent benefits such as high spectral efficiency and resistance to frequency-selective channels. In this paper, a novel energy and spectrally efficient scheme called asymmetrically clipped absolute value optical OFDM (AAO-OFDM) is proposed for intensity-modulated direct-detection (IM/DD) systems. In AAO-OFDM, absolute value optical OFDM (AVO-OFDM) signals on the even subcarriers and asymmetrically clipped optical OFDM (ACO-OFDM) signals on the odd subcarriers are combined for simultaneous transmission, which employs all the subcarriers requiring no DC biases. For AVO-OFDM scheme, the frequency symbols are firstly modulated on the even subcarriers, which are then fed into an inverse fast Fourier transform block. Afterwards, the absolute values of the bipolar time-domain signals are taken to guarantee nonnegativity, while their signs are mapped to the complex-valued symbols and modulated on the odd subcarriers. Since there remain unused odd subcarriers, other useful symbols can be modulated on them, which leads to the conventional ACO-OFDM scheme. At the receiver, the ACO-OFDM symbols on the odd subcarriers are demodulated firstly, which are reconstructed and removed from the received signals. Afterwards, the remaining signals are utilized to detect the AVO-OFDM symbols with the aid of the demodulated sign symbols on the odd subcarriers. Theoretical analysis and simulation results show that AAO-OFDM has lower peak-to-average power ratio than other optical OFDM schemes, which makes it less sensitive to the nonlinearity of the optical devices. Furthermore, it achieves better bit error rate performance compared to its counterparts for the same spectral efficiency.Index Terms-Intensity modulation with direct detection, orthogonal frequency division multiplexing, energy efficiency, spectral efficiency.