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After establishing itself in the radio domain, Spread spectrum code-division multiplexing/multiple-access (CDMA) has seen a recent upsurge in optical domain as well. Due to its fairness, flexibility, service differentiation and increased inherent security, CDMA is proved to be more suitable for the bursty nature of local area networks than synchronous multiplexing techniques like Frequency/Wavelength Division Multiplexing (F/WDM) and Time Division Multiplexing (TDM). In optical domain, CDMA techniques are commonly known as Optical-CDMA (O-CDMA). All optical CDMA systems are plagued with the problem of multiple-access interference (MAI). Spectral amplitude coding (SAC) is one of the techniques used in the literature to deal with the problem of MAI. The choice of spreading code in any CDMA system is another way to ensure the successful recovery of data at the receiving end by minimizing the effect of MAI and it also dictates the hardware design of the encoder and decoder. This thesis focuses on the efficient design of encoding and decoding hardware. Perfect difference codes (PDC) are chosen as spreading sequences due to their good correlation properties. In most of the literature, evaluation of error probability is based on the assumptions of ideal conditions. Such assumptions ignore major physical impairments such as power splitting losses at the multiplexers of transmitters and receivers, and gain losses at the receivers, which may in practice be an overestimate or underestimate of the actual probability of error. This thesis aims to investigate thoroughly with the consideration of practical impairments the applications of PDCs and other spreading sequences in optical communications systems based on spectral-amplitude coding and utilizing codedivision as multiplexing/multiple-access technique. This work begins with a xix general review of optical CDMA systems. An open-ended practical approach has been used to evaluate the actual error probabilities of OCDM/A systems under study. It has been concluded from results that mismatches in the gains of photodetectors, namely avalanche photodiode (APDs), used at the receiver side and uniformity loss in the optical splitters results in the inaccurate calculation of threshold level used to detect the data and can seriously degrade the system bit error rate (BER) performance. This variation in the threshold level can be compensated by employing techniques which maintain a constant interference level so that the decoding architecture does not have to estimate MAI every time to make a data bit decision or by the use of balanced sequences. In this thesis, as a solution to the above problem, a novel encoding and decoding architecture is presented for perfect difference codes based on common zero code technique which maintains a constant interference level at all instants in CDM system and thus relieves the need of estimating interference. The proposed architecture only uses single multiplexer at the transmitters for all users in the system and a simple correlation based receiver for each user. The proposed configuration not only preserves the ability of MAI in Spectral-Amplitude Coding SAC-OCDM system, but also results in a low cost system with reduced complexity. The results show that by using PDCs in such system, the influence of MAI caused by other users can be reduced, and the number of active users can be increased significantly. Also a family of novel spreading sequences are constructed called Manchestercoded Modified Legendre codes (MCMLCs) suitable for SAC based OCDM systems. MCMLCs are designed to be used for both single-rate and Multirate systems. First the construction of MCMLCs is presented and then the bit error rate performance is analyzed. Finally the proposed encoding/decoding architecture utilizing perfect difference codes is applied in wireless infrared environment and the performance is found to be superior to other codes.