A new kind of optical local area network (LAN), using a demand assign wavelength division multiple access (DA-WDMA) scheme, has been proposed. The proposed LAN consists of two parts; an ordinary standardized LAN and an overlaid network using wavelength division (WD) channels. The proposed network can provide bit-rate independent communication channels on the ordinary LAN without limiting the capacities for the other channels. It also exhibits upgrade possibilities from present standardized networks. An access controller, which consists of software in addition to the ordinary LAN controller, a digital signal processor (DSP) etc., was developed for DA-WDMA control. The network node operation has been demonstrated using guided-wave acousto-optic (AO) mode converters as a tunable wavelength add-drop multiplexer (ADM).