The simulation and numerical analysis of erbium-doped fiber-ring lasers for generation and enhancement of chaos is presented. The degree of chaos determines the level of security in chaotic optical communication systems. Various parameters such as pump power, modulation index, modulation frequency, decay rate, and cavity gain can be varied as a control in producing higher degree optical chaos. The effect of each pertinent model parameter is analyzed in time-expanded mode using a phase plot direct-observation method and time series analysis of the time domain wave form by calculating its Lyapunov exponents. The mathematical and numerical analysis of the generated chaos helps in generalizing the trend through variation of cavity parameters and driving conditions in achieving a relatively higher degree of chaos. These trends help in optimizing various parameters for generation of new sequences of optical chaos in realizing better security. To gain an insight into chaotic signatures, the width and height of individual pulses, relationship of their time periods, gain quenching, shape, formation of bunches, and humps of the chaotic wave forms are also analyzed. The study of individual and cumulative behavior of all the parameters in enhancing optical chaos leads toward a reliable development in designing secure communication systems.