The goal of wavelength conversion technology is low cost, low-power dissipation and integratability. An all-optical wavelength conversion scheme based on Fabry-Pérot laser diode (FP-LD) mode competition is proposed. The wavelength conversion employing dual-mode competition of the FP-LD is realized by injecting probe light and signal light into different modes of the FP-LD. The principle of wavelength conversion is analyzed. The signal-to-noise ratio (SNR), extinction ration (ER) and chirp characteristics of the signal after wavelength conversion are studied experimentally. The wavelength conversion and transmission experiments of 10 Gb/s non-return-to zero (NRZ) signals at different wavelengths are conducted. The results of bit error rate test show that the power penalty after wavelength conversion is less than 1 dB, and the power penalties of different wavelengths after 20 km transmission are all less than 1 dB.