The electrical nonlinearity of silicon modulators based on reversed PN junctions was found to severely limit the linearity of the modulators. This effect, however, was inadvertently neglected in previous studies. Considering the electrical nonlinearity in simulation, a 32.2 dB degradation in the CDR3 (i.e., the suppression ratio between the fundamental signal and intermodulation distortion) of the modulator was observed at a modulation speed of 12 GHz, and the spurious free dynamic range was simultaneously degraded by 17.4 dB. It was also found that the linearity of the silicon modulator could be improved by reducing the series resistance of the PN junction. The frequency dependence of the linearity due to the electrical nonlinearity was also investigated.