The impact of crosstalk in an arrayed-waveguide (AWG) router on the perform
ance of an N-channel optical add-drop multiplexer (OADM) with m add/drop ch
annels and n-pass channels is theoretically investigated. A single arrayed-
waveguide router is simultaneously used for multiplexing and demultiplexing
. This results in crosstalk not only from the incoming channels, but from t
he outgoing channels as well. We show that the performance of the OADM degr
ades as either N or m are increased, suggesting that the number of channels
in a network based on OADM's is limited by crosstalk in the AWG router. Wh
en an optical filter is added at the output of the OADM the digital signal-
to-noise ratio Q is independent of N and rn, and within a few tenths of a d
ecibel of the perfect filtering case.