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Copropagation of return-to-zero differential binary phase-shift keying (RZ-DBPSK) with RZ on-off keying (RZ-OOK) in wavelength-division-multiplexed (WDM) transmission has been found to be detrimental to RZ-DBPSK due to cross-phase modulation (XPM) degradations induced by pattern-dependent RZ-OOK. A method is proposed at the optical cross-connect (not at the transmitter end) to alleviate this degradation, in which the impairing RZ-OOK channel is converted to RZ binary phase-shift keying (RZ-BPSK) in a semiconductor optical amplifier (SOA) prior to 50-GHz-spaced WDM transmission. The data format conversion completely compensates for the XPM degradation, while resulting in an optical signal-to-noise ratio transmission penalty of <2 dB for converted RZ-BPSK relative to RZ-OOK. Moreover, the wavelength conversion may be used to address contention resolution at the cross-connects.