The performance of the hybrid optical codedivision multiple-access (OCDMA) and wavelength division multiplexing (WDM) network is analyzed. End-toend bit error rate (BER) of the network adopting error correction coding is calculated, and the expressions which show spectral efficiency performance, including the effects of polarization mode dispersion (PMD), are derived. The result demonstrates that PMD can decrease spectral efficiency dramatically. Analysis of the blocking performance with and without orthogonal optical codes (OOCs) and wavelength conversion shows that OOC and wavelength can improve the performance of the network. Since the wavelength conversion is much more costly than OOC conversion, a scheme for spare placement wavelength conversion is introduced to balance the cost and performance.