External modulation, such as with a Mach–Zehnder modulator (MZM), is commonly used in optical communications to reduce nonlinear signal distortions. However, in addition to the signal distortion due to chromatic dispersion, the MZM itself is another source of nonlinear distortion. Despite the fact that dispersion is a linear distortion that develops in the field domain, in low-cost direct-detection links, the detector destroys the system’s linearity. Therefore, in these channels, dispersion is another source of nonlinearity. We suggest the implementation of a dispersion module to substantially reduce the MZM-induced nonlinearity. This technique is possible only because linear dispersion mitigation filters can be implemented post detection. We show experimentally that chromatic dispersion can indeed substantially reduce the channel’s nonlinear distortion, in good agreement with theoretical predictions.