Abstract: In an optical communication system, in order to reduce simultaneously both second and third harmonic distortion in a light beam from a modulated semiconductor laser, a nonlinear interferometric deivce--such as a Fabry-Perot etalon--is inserted in the path of the beam. The parameters of the interferometric device--such as its phase and finesse--are selected such that, for a suitable laser bias current, the second and third harmonics produced by nonlinearities of the laser (plus nonlinearities of the transmission medium such as an optical fiber, if any, through which the beam propagates from source to receiver) are significantly compensated by nonlinearities of the interometric device.