AbstractAn original hybrid pulse position modulation code division multiple access (PPM‐CDMA) scheme is proposed and studied in the context of the indoor infrared communication network. The use of optical orthogonal codes (OOC) is proposed and original results are presented illustrating the improvement in bit rate achieved by utilizing PPM‐CDMA rather than on/off keying (OOK) CDMA. Results are presented for the maximum number of users that can communicate over the network at a given bit rate and it is shown that there exists an optimum PPM order, at a given number of users, that maximizes the achievable bit rate. Original results are presented for the false‐alarm errors due to the OOC cross correlations, and the optimum system operating parameters that minimize these errors are specified.