Stable multi-wavelength lasing based on in-fiber Mach-Zehnder interferometer (MZI) introduced by dispersion compensation fiber (DCF) in an erbium-doped fiber ring laser is presented. This interference effect effectively suppresses the unstable mode competition caused by homogeneous line broadening which leads to the generation of stable multi-wavelength lasing at room temperature. The dual-wavelength lasing is so stable and the peak fluctuation is less than about 1.1 dB, while the peak fluctuation of the tri-wavelength lasing is much larger with a value of about 4 dB.