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This paper proposes to combine prechirping with dispersion management scheme in such a way as to suppress the power penalty induced by self-phase modulation (SPM) and cross-phase modulation (XPM) in 40-Gb/s per channel wavelength-division multiplexed (WDM) transmission systems with long-amplifier spacing. First, we show that the optimum total dispersion to minimize SPM depends on prechirping and the local dispersion of the transmission fiber, unlike that for minimizing XPM. Next, it is shown that, by optimizing the combination of prechirping and local dispersion, these two optima can be made to match so as to improve the allowable maximum fiber input power. Finally, the operation of the proposed optimization scheme is confirmed experimentally, and 4/spl times/40-Gb/s WDM transmission over 400 km of nonzero dispersion-shifted fiber (NZDSF) is demonstrated successfully with the fiber input power of +10 dBm/ch and 250 GHz channel spacing.