Abstract In this paper, we study the performance of optical code-division multiple access (OCDMA) systems using Diagonal Eigenvalue Unity (DEU) code under various link parameters. DEU code was constructed based on Jordan block matrix with simple algebraic ways. Four sets of DEU code based on the code weight W and number of users N for the combination (even, even), (even, odd), (odd, odd) and (odd, even) are constructed. This combination gives a DEU more flexibility in code weight selection and free cardinality. The impact of the fiber dispersion effects on the multiple access interference (MAI) is reported using a commercial optical systems simulator Virtual Photonic Instrument (VPI™) version 7.1. The DEU code is characterized mathematically with reported codes which use similar techniques. We analyzed and optimized the data rate, fiber length, and channel spacing in order to reduce the BER without the need to deploy dispersion compensating devices. The performance and optimization of DEU code in OCDMA system are reported. We have demonstrated that, for a high data rate (higher than 2.5Gb/s), even if dispersion compensated devices are not deployed, the BER can be significantly improved when the DEU code desired parameters are selected. We have shown that when compensation dispersion devices are not deployed in the system, there is a tradeoff between the limited dispersion effects and the MAI.