Optical add-drop multiplexer (OADM) is one of the key components for wavelength division multiplexing (WDM) system. A novel OADM based on Mach-Zehnder (M-Z) interferometer and fiber Bragg grating (FBG) is proposed. The OADM consists of two three-port optical circulators, a FBG, and a M-Z interferometer. In the structure, the M-Z interferometer acts as an optical switch. The characteristic of the OADM is studied experimentally. In the experiment, the OADM can add/drop one of the multi input channel or pass the channel directly by adjusting the difference of the two arms of the interferometer. The channel isolation is more than 20 dB. The OADM has many advantages such as simple structure, small size, low cost and so on. It can be used in practical WDM system.