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A novel cascaded second-order nonlinear interaction (χ(2)), which is simultaneously based on sum frequency generation (SFG) and difference frequency generation (DFG) processes, is proposed and analyzed in quasi-phase-matched wavelength converters. Analytical expressions with clear physical insights are derived for the converted light. It is shown that the same conversion efficiency can be achieved by employing two pump sources with lower output power (Pp1,Pp2) in this novel scheme as compared with the conventional cascaded wavelength conversion technique based on second-harmonic generation and difference frequency generation (SHG+DFG) with a single higher power pump beam (Pp=Pp1+Pp2). The theoretical results are consistent with the experimental ones. It is found that the pump wavelength difference can be separated by a span as large as 75 nm, while large 3-dB signal conversion bandwidth is retained. The results show that the novel cascaded χ(2) wavelength conversion scheme is very attractive for practical applications.