This thesis addresses demodulation in direct detection systems and signal processing of high speed phase modulated signals in future all-optical wavelength division multiplexing (WDM) communication systems where differential phase shift keying (DPSK) or differential quadrature phase shift keying (DQPSK) are used to transport information. All-optical network functionalities -such as optical labeling, wavelength conversion and signal regeneration- are experimentally investigated. Direct detection of phase modulated signals requires phase-to-intensity modulation conversion in a demodulator at the receiver side. This is typically implemented in a one bit delay Mach-Zehnder interferometer (MZI). Two alternative ways of performing phase-to-intensity modulation conversion are presented. Successful demodulation of DPSK signals up to 40 Gbit/s is demonstrated using the proposed two devices. Optical labeling has been proposed as an efficient way to implement packet routing and forwarding functionalities in future IP-over-WDM networks. An in-band subcarrier multiplexing (SCM) labeled signal using 40 Gbit/s DSPK payload and 25 Mbit/s non return-to-zero(NRZ) SCM label, is successfully transmitted over 80 km post-compensated non-zero dispersion shifted fiber (NZDSF) span. Using orthogonal labeling, an amplitude shift keying (ASK)/DPSK labeled signal using 40 Gbit/s return-to-zero (RZ) payload and 2.5 Gbit/s DPSK label, is generated. WDM transmission and label swapping are demonstrated for such a signal. In future all-optical WDM networks, wavelength conversion is an essential functionality to provide wavelength flexibility and avoid wavelength blocking. Using a 50 m long highly nonlinear photonic crystal fiber (HNL-PCF), with a simple four-wave mixing (FWM) scheme, wavelength conversion of single channel and multi-channel high-speed DPSK signals is presented. Wavelength conversion of an 80 Gbit/s RZ-DPSK-ASK signal generated by combining different modulation formats is also reported. Amplitude distortion accumulated over transmission spans will eventually be converted into nonlinear phase noise, and consequently degrade the performance of systems making use of RZ-DPSK format. All-optical signal regeneration avoiding O-E-O conversion is desired to improve signal quality in ultra long-haul transmission systems. Proof-of-principle numerical simulation results are provided, that suggest the amplitude regeneration capability based on FWM in a highly nonlinear fiber (HNLF). The first reported experimental demonstration of amplitude equalization of 40 Gbit/s RZ-DPSK signals using a 500 m long HNLF is presented. Using four possible phase levels to carry the information, DQPSK allows generation of high-speed optical signals at bit rate that is twice the operating speed of the electronics involved. Generation of an 80 Gbit/s DQPSK signal is demonstrated using 40 Gbit/s equipment. The first demonstration of wavelength conversion of such a high-speed signal is implemented using FWM in a 1 km long HNLF. No indication of error floor is observed. Using polarization multiplexing and combination of DQPSK with ASK and RZ pulse carving at a symbol rate of 40 Gbaud, a 240 Gbit/s RZ-DQPSK-ASK signal is generated and transmitted over 50 km fiber span with no power penalty. In summary, we show that direct detection and all-optical signal processing -including optical labeling, wavelength conversion and signal regeneration- that already have been studied intensively for signals using conventional on-off keying (OOK) format, can also be successfully implemented for high-speed phase modulated signals. The results obtained in this work are believed to enhance the feasibility of phase modulation in future ultra-high speed spectrally efficient optical communication systems.