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A novel scheme for reducing Rayleigh beat noise in centralized light source dense wavelength-division-multiplexed passive optical networks is demonstrated using an optimized channel-detuned optical filtering of 30 GHz and phase-modulation-induced spectral broadening of a 10-Gb/s upstream nonreturn-to-zero (PM-NRZ) signal. The required optical-signal-to-Rayleigh-noise-ratio (OSRNR), characterized experimentally, can be reduced by up to 16 dB while retaining negligible transmission penalty over 20-km single-mode fiber without dispersion compensation. Numerical analysis is performed to study the tradeoff between OSRNR improvement and attenuation of the PM-NRZ signal as a function of different channel detuning and center wavelength suppressions