The performance of an optical code-division multiplexing (CDM) system using spectral encoding and bipolar codes under the influence of four-wave mixing (FWM) is evaluated in terms of error probability. In the CDM system the first order crosstalk due to four-wave mixing can be cancelled using antisymmetric mask patterns in the encoders and decoders. The second order FWM crosstalk is proportional to the number of users supported by the system. For a CDM system using an ideal broadband source, shot noise is the major factor that causes error in the lower signal power range, while four-wave mixing crosstalk dominates in the higher signal power range. The CDM system has a lower error probability in the higher signal power range than the WDM system, i.e., the performance of the CDM system is better than that of the WDM system.