An all-optical discrete Fourier transformer (ODFT) based on SiO2 plamar lightwave circuit (PLC) technologies and made up of optical directional couplers,phase shifters,and optical delay lines is designed. Whose principle is investigated and an ODFT chip operating at 4×40 Gb/s is designed and optimized. Detailed designation and implementation methods are also given. Based on that,an all-optical orthogonal frequency division multiplexing (OFDM) transmission system is designed,eliminating the processing speed introduced by electronics as in conventional OFDM systems. The VPItransmissionMaker V7.6 is used to evaluate system performances. Simulation results prove the effectiveness of the all-optical OFDM system. The bit error rate (BER) is lower than 3×10-11 after transmission through 320 km in the optical fibers. All-optical OFDM has been treated as a good candidate for the long-haul and high-speed transmission technology.