Abstract: Orthogonal frequency division multiplexing (OFDM) is one of the Multi-Carrier Modulation (MCM) techniques that transmit signals through multiple carriers. These carriers (subcarriers) have different frequencies and they are orthogonal to each other. There are different parameters which alter the performance of OFDM system. In this paper, the effect of cyclic prefix length (CP) on optical (OFDM) system is investigated. Although employing a CP as the guard interval is a simple way to combat inter-symbol interference (ISI) and inter-carrier interference (ICI), it reduces the transmission efficiency of the system. The simulation results show the effect of CP length in power receiver, penalty of power and improved the performance based on signal to noise ratio (SNR). In addition, a tradeoff is needed between reduced interference effects and transmission efficiency.