A theoretical model of wavelength conversion based on cross gain modulation (XGM) in semiconductor optical amplifier (SOA) is derived. Characteristics of extinction ratio (ER) of converted signal under both co- and counter-propagating scheme are discussed in details. It is shown that the ER of output probe would decrease with the increase of the bit rate of signal, and the larger the bit rate of the signal is, the faster the ER of the output probe decreases. The ER attains optimal value when the pump wavelength is equal to the small signal gain peak wavelength. The ER of down wavelength conversion (Δλ<0) is larger in evidence than that of up wavelength conversion (Δλ>0). The ER of output probe would be larger as the increase of ER of input signal. And the ER characteristic of output probe of counter-propagating scheme is better than that of co-propagating scheme under the same condition. Finally, the characteristic difference for two schemes is explained from physical layer.