In the modern world, bandwidth and data rates are two most important parameters under consideration in any communication system. An optical fiber communication system is capable of transmitting the data at high bit rates and has a large bandwidth capacity. This high data rate and bandwidth capacity in an optical fiber communication system are further enhanced by using wavelength division multiplexing (WDM) in conjunction with the information transmission system, in which information from multiple sources are transferred using the same fiber, at the same time, but at different wavelengths. But the high capacity and data rates in optical WDM system is limited by nonlinear effects that occur in optical WDM system, which not only pose a limitation on the channel capacity and data rates but also degrades the performance of the data transmission system. In this paper, analysis has been done to investigate the efficiency of effect under the influence of different system parameters such as chromatic dispersion coefficient, channel spacing, transmission power level, effective area of fiber and fiber length in the form of input signals and output signals frequency spectrums.