Abstract: This paper discussed on a simulation of optical transmission system in optical fiber. To achieve the foremost effective performance of communication system, dispersion should be stipendiary. Fiber bragg grating is chosen as important components to compensate the dispersion in optical communication system. The simulation of transmission system will be analyzed based on different parameters by using optisystem simulator. A 20 Gb/s Non Return To Zero (NRZ) signal is launched onto 50 km long standard single mode fiber. By simulating a model of communication system and using the most suitable settings of the system which include input power (dbm), fiber cable length, the performance of the system will be evaluated. Comparison of eye diagrams show a marked improvement in the link performance due to compensation of dispersion.