We analyze the system performance of gain-saturated SOA-based all-opti
cal wavelength shifting with respect to its dynamic characteristics. W
hen considering the risetime, contrast ratio and intersymbol interfere
nce, we find that there ;exists an optimal probe power and wavelength
for high-speed wavelength shifting which reduces the power penalty by
3 dB. The minimum power penalties for the data rates of 10 and 20 Gb/s
are 2.5 and 5 dB, respectively.