Optical links using traditional modulation formats are reaching a plateau in terms of capacity, mainly due to bandwidth limitations in the devices employed at the transmitter and receivers. Advanced modulation formats, which boost the spectral efficiency, provide a smooth migration path towards effectively increase the available capacity. Advanced modulation formats however require digitalization of the signals and digital signal processing blocks to both generate and recover the data. There is therefore a trade-off in terms of efficiency gain vs complexity. Polybinary modulation, a generalized form of partial response modulation, employs simple codification and filtering at the transmitter to drastically increase the spectral efficiency. At the receiver side, polybinary modulation requires low complexity direct detection and very little digital signal processing. This paper provides an overview of the current research status of the key building blocks in polybinary systems. The results clearly show how polybinary modulation effectively reduces the bandwidth requirements on optical links while providing high spectral efficiency.