A 16*10-Gb/s optical time-division-multiplexing (OTDM) system was demonstrated experimentally with a well-designed ultrashort pulse source based on an electro-absorption modulator (EAM) and nonlinear fiber compressor. The obtained 10-GHz stable and pedestal-free pulse train has 2-ps width, high extinction ratio, and low timing jitter. An ultrafast demultiplexer based on a nonlinear optical loop mirror (NOLM) including a commercially available highly nonlinear fiber (HNLF) is employed to demultiplex data signal from 160 to 10 Gb/s. A back-to-back error-free demultiplexing experiment is carried out to verify the system performance.