We demonstrate 75-km single-mode fiber transmission of a 40-Gb/s optical 16-level quadrature amplitude modulation (16QAM) signal generated by a quad-parallel Mach–Zehnder optical modulator (QPMZM), where four Mach–Zehnder structures are embedded in parallel monolithically on a lithium niobate substrate. Owing to the optical 16QAM signal generation method based on the coherent superposition in the QPMZM and improved coherent receiver utilizing digital filters, improvement of receiver sensitivity has been achieved as well. The experimentally obtained receiver sensitivity for near the forward-error correction limit and power penalty due to transmission are experimentally evaluated as 16.3 dB and about 2–3 dB, respectively.<?Pub _bookmark Command="[Quick Mark]"?>