Wavelength conversion of a 40-Gb/s return-to-zero differential phase-shift keying signal is demonstrated in a highly nonlinear photonic crystal fiber (HNL-PCF) for the first time. A conversion efficiency of -20 dB for a pump power of 23 dBm and a conversion bandwidth of 31 nm, essentially limited by the gain bandwidth of erbium-doped fiber amplifiers, are obtained in only 50-m dispersion-flattened HNL-PCF with nonlinear coefficient equal to 11 W/sup -1//spl middot/km/sup -1/. This experiment demonstrates the potential of four-wave mixing in HNL-PCF as a modulation format and bit rate transparent wavelength conversion mechanism in future high-speed systems.