Abstract-Orthogonal amplitude shift keying/differential phase-shift keying (ASK/DPSK) labeling is a promising approach to ultrahigh packet-rate routing and forwarding in the optical layer. However, the limitation on the payload extinction ratio (ER) is a detrimental effect for network scalability and transparency. This paper presents theoretical and experimental studies of ASK/ DPSK labeling. It proposes that dc-balanced 8B10B coding can greatly improve ER tolerance, which in turn leads to better system performance. By using the 8B10B coding method, the paper demonstrates transmission and optical label swapping for a 40 Gb/s ASK payload and a 2.5 Gb/s DPSK label with an overall power penalty of 3.3 dB for the payload and 0.3 dB for the label. The experimental results also show that the ER is allowed to be as high as 12 dB.Index Terms-Amplitude shift keying, differential phase shift keying, optical label switching, orthogonal modulation.