The impact of phase noise, chromatic dispersion, and nonlinear effects on a 10-Gb/s optical differential quadrature phase-shift keying (oDQPSK) system has been evaluated by computer simulations. Both single channel and multiple wavelength-division-multiplexing channels have been considered. The results show that the low spectral width of this format allows a reduced channel spacing as low as 25-12.5 GHz. Furthermore, the use of this format leads to an increase in dispersion tolerance together with a robustness to nonlinear effects due to the signal near constant envelope characteristics. Finally, simulations show that phase noise can be the limiting factor of oDQPSK systems.