Abstract: For implementing wide/metropolitan area network in optical fiber communication system the key technology that can be utilized is wavelength division multiplexing (WDM). We discuss the use of WDM in metropolitan networks along with its special feature of using optical add drop multiplexers and also design issues in implementing these systems. The issue of nonlinear crosstalk induced in metropolitan networks is considered in terms of power penalty. Also, the effect of dispersion induced in optical fibers is considered by using two types of transmission systems. One is considering the non-zero dispersion shifted fiber (NZDSF) in dispersion effected environment and second is, implementing dispersion compensation after normal single mode fiber (SMF + DCF). The effect of nonlinear cross talk which can limit transmission performance is discussed in both cases in context with different parameters like power penalty, frequency difference between signal & crosstalk and transmission distance etc.