The coupled mode theory of fiber Bragg grating (FBG) is analyzed. The fabrication course of FBG is explored and optimized, and the good quality FBGs with the wavelengths that fit the ITU-T criterion are made. The 4×10 Gb/s-400 km and 4×10 Gb/s-800 km transmission systems on G.652 fiber with dispersion compensation by FBGs are implemented. The FBGs are made by double lens and scanning stage with phase mask, respectively. The power penalty is less than 2 dB in each channel, and the best power penalty is negative. And the polarization mode dispersion (PMD) of 4×10 Gb/s-800 km transmission system is monitored for a long time. The result shows that in 10 Gb/s system, the PMD compensation is not needed. Developing the 10 Gb/s transmission system fits the situation of China.