A hybrid direct sequence/frequency hopping (DS/FH) scheme is proposed for optical code division multiple access (OCDMA) system. The optical encoder/decoder with prime hop sequence is based on fiber Bragg gratings (FBGs), and double optical hard limiters are placed on both sides of decoder respectively. With such a design, the DS/FH OCDMA system has large number of simultaneous user, high power efficiency and low bit error rate (BER).