The limited band of optical and electrical devices in an intensity-modulation direct detection (IM/DD) system is considered to be a major bottleneck that hinders the increase in transmission capacity. Spectrally efficient modulation formats and advanced digital signal processing are key technologies to improving the performance of IM/DD for high-speed short-reach optical systems. In this paper, we propose and experimentally demonstrate a novel Nyquist eight-level, pulse-amplitude, single-carrier modulation with frequency-domain equalization (PAM8-SCFDE). In addition, 40-GBd Nyquist PAM8-SCFDE signals can be successfully transmitted over 2-km standard single-mode fiber or 20-km large effective area fiber based on 10-G-class DAC and photodiode. Therefore, the achieved aggregate data rate is 120 Gb/s, and the measured bit error rate (BER) is under 7% pre-forward-error-correction (FEC) threshold of $3.8\times 10^{-3} $ . Compared with conventional PAM8, this scheme can provide double spectral efficiency and 6-dB receiver sensitivity improvement.
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