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In this paper, simulative analysis of 40Gb/s long haul (500–2000km) DWDM system with ultra high capacity upto 1.28Tb/s has been carried out for carrier-suppressed return-to-zero (CSRZ), duobinary return-to-zero (DRZ) and modified duobinary return-to-zero (MDRZ) modulation formats. The DWDM system has been analyzed for the pre, post and symmetrical dispersion compensation schemes for 16 Channels with 25GHz channel spacing in order to find the optimum modulation format for a high bit rate optical transmission system. The effect of variation in input power and transmission distances is observed in terms of Q value and eye opening for various formats. It is found that symmetrical compensation is superior to pre and post dispersion compensation schemes. It has also been observed that the performance of DWDM system is severely limited by the four-wave mixing (FWM) effect and is determined that …