In this paper, an analytical approach is presented to evaluate the performance of DWDM system with intensity modulation direct detection (IM/DD) due to the effects of amplified spontaneous emission (ASE) noise of optical amplifier, optical receiver noises and crosstalk. And a system has been proposed with an optimum number of amplifiers with higher gain and an improved optical receiver has been proposed. We have investigated the effects of optical amplifiers and optical receiver in the presence of crosstalk on the overall performance; in particular, Signal-to-Noise Ratio (SNR) and Bit-Error-Rate (BER) performance of a DWDM system. The system performances are evaluated for varying different amplifier gains, number of optical amplifiers, hop length, number of hops, receiver bandwidth and receiver gain considering the relationship between crosstalk and the number of wavelengths channel spacing. It is found that, the performance is highly degraded due to crosstalk and noises. As a result the system suffers significant power penalty at a given BER.