In this paper, we introduce an optimal signal constellation design algorithm suitable for wavelength-division-multiplexed systems dominated by cross-phase modulation (XPM), which is called XPM-OSCD. Additionally, a corresponding demodulation scheme is also proposed in order to better compensate for the nonlinear phase errors. In this scheme, the cumulative log-likelihood function is used as the optimization criterion. The signal constellations obtained by this algorithm significantly outperform conventional quadrature amplitude modulation (QAM).