High-capacity multiwavelength ring networks with bidirectional WDM add/drop multiplexer (WADM) having built-in EDFAs is analyzed and demonstrated. All WDM channels can be added/dropped independently in each direction. The capacity of a bidirectional ring is found to be approximately twice that of an unidirectional ring. An eight-wavelength WADM is demonstrated for a data rate of 10 Gb/s per channel, providing an overall capacity of 80 Gb/s. The performance of the add/drop multiplexer is not degraded by backward backscattering light. The same WADM is also demonstrated to be able to serve as a bidirectional in-line optical amplifier.