Optical mode switching between two adjacent modes separated by 1 nm in a two-electrode DFB laser was observed. The switching time between these two modes, limited by the laser structure, was less than 550 ps. Using this optical mode switching, a transmission system up to 2 Gbit/s with a new type of modulation called wavelength shift keying* has been demonstrated.each. The rear electrode of the laser was matched with a 47 Ω resistor. At the receiving end, a solid FabryPerot interferometer (FP) was inserted before a high speed PIN photodiode and used as a tunable optical filter. The FP optical filter has a 320 GHz FreeSpectral-Range (FSR) and a finesse of 50. An optical spectrum analyser with 0.1 nm resolution was used to observe the spectral output of the two-electrode DFB laser.