A novel technique is proposed for simultaneous monitoring of optical signal-to-noise ratio (OSNR) and chromatic dispersion (CD). The scheme is based on the cross-phase modulation effect in a highly nonlinear fiber, which induces a change in the optical tones according to the impairments. The power ratio of the optical tones at two separate frequencies is utilized for monitoring. Improvements in the maximum measurable OSNR, CD and dynamic range can be obtained using only the clock tone for the non-return-to-zero, return-to-zero with a 50% duty cycle differential quadrature phase-shift keying, differential phase-shift keying and on-off keying signals at 80 Gb/s. For the return to zero differential quadrature phase shift keying (RZ-DQPSK) system, the OSNR of 4–40 dB can be monitored with a 36.73 dB dynamic range, and a chromatic dispersion of 0–117 ps/nm can be monitored with a 48.68 dB dynamic range. A correlation is built to describe the relationship of the power ratio with the OSNR and chromatic dispersion which has a root-mean-squared error of 1.41. The delay group dispersion insensitivity, the impact of the input signal power, and the filter selection are investigated. The design enables accurate monitoring, simple operation and may be used in a wide range.