Abstract. We analyze the mode competition (MC) phenomenon in sinusoidally modulated laser diodes and the associated noise. Contribution of MC noise to the noise performance of directly modulated fiber links is evaluated in terms of the noise factor (NF) of the link. MC is analyzed through intensive simulation of laser dynamics and noise basing on a multimode rate equation model that takes into account both symmetric and asymmetric suppressions of the cross-modal gain. Variations of the MC relative intensity noise (RIN) of both the total output and the oscillating modes with modulation conditions are investigated. The obtained results showed that the modulated signal has six distinct waveforms depending on the modulation conditions. The modulated laser oscillates in single mode when the signal is continuous, and converts into multimode when the signal is pulsing. Contribution of MC noise to NF of the link increases with the increase in the modulation depth and with the decrease in the modulation frequency, except when the signal has period doubling. This contribution is negligible under high modulation frequencies when the laser signal is continuous and uniform, and is most enhanced (~53 dB) under low-modulation frequencies when the signal is pulsing and superposed with non-uniform relaxation oscillations.