Nyquist wavelength division multiplexing (WDM) using a 40 Gbit/s channel signal is applied to terahertz (THz)-wave communication with a view to increasing its spectral efficiency and capacity. A 2 × 40 Gbit/s Nyquist WDM signal in the THz-band is both generated and demultiplexed by the assistance of optical technology. The optical-domain demultiplexing is adopted mainly due to the difficulty in both the direct THz-wave-domain and the subsequent radio-frequency (RF)-domain demultiplexing. The received THz-wave Nyquist WDM signal at an antenna is divided into two signals, which are down-converted into RF signals with heterodyne detection utilizing different frequency local sinusoidal waves. Each signal in the RF-domain is again transformed into an optical signal through an optical modulator, and each 40 Gbit/s channel is extracted from one of the generated sidebands at each optical modulator output with an optical Nyquist filter. Bit error rates (BERs) on the order of 10−5 and 10−7 (below the first KP4 forward error correction threshold) were obtained for the demultiplexed two 40 Gbit/s channels. In addition to the explanation of the experimental setup and operating principle of the optical-domain demultiplexing method for the THz-wave Nyquist WDM signal, some experimental results are reported to show the validity of our proposed demultiplexing method and factors to limit the BERs.