Abstract: Evolving optical communication systems are leading towards an all-optical network, where destination and routing information is incorporated in the carrier wavelength of the signal. It is possible to extend the agility and flexibility of the network by including a Frequency Shift Keyed (FSK) header to all data packets, this can provide additional routing information which can be processed entirely and instantly in the wavelength domain. Thus reducing the queuing required at individual nodes within the network. However, in such a network, due to the number of co-propagating channels and the tight frequency tolerances that are necessary, the optical fibre nonlinearities become very significant and can be detrimental to the use of FSK in such a system. The nonlinear effect under consideration in this paper is Cross Phase Modulation (XPM). This effect occurs when amplitude changes on one channel induce frequency changes on all the others. In a network that simultaneously employs both amplitude and frequency modulation, (where AM is used to transmit payload data and FSK transmits the routing information), the FSK header on one signal can be greatly influenced by the frequency changes induced on it due to the amplitude changes of other signals. In this paper, simulations of the effects of XPM on an FSK signal will be presented. This will include the effects as the number of channels, input optical powers and bitrates are increased. As well as a method to alleviate the effect of the induced frequency variations on the FSK signal.