We demonstrate a directly modulated 2.5 Gb/s x 16-channel wavelength-division-multiplexed (WDM) transmission system over 640 km of conventional single-mode fiber using the dispersion compensating fiber, The capacity of this system could he increased easily without adjusting the outside plant by replacing the directly modulated 2.5-Gb/s channels with the externally modulated 10-Gb/s channels. To demonstrate the feasibility of this capacity upgrade, we implement a 130-Gb/s (10 Gb/s x 12 channels + 2.5 Gb/s x 4 channels) WDM transmission system using the same fiber-optic link.