Abstract: In this study we discuss CDMA based Optical LAN. The CDMA based technique enables multiple users to transmit data across a serial link at any given time simultaneously unlike the method followed with Ethernet. With security being the prime demand of today`s world, allowing multiple users to access the channel simultaneously may be critical, but in this respect the CDMA technology proposed by us since uses unique codes for each user, would also provide a solution to the problem. We have done simulation using Mat Lab to study the effectiveness of the scheme proposed and the results are presented in this study.