Subcarrier multiplexing uses the available fiber bandwidth in optical transmission, efficiently. Semiconductor lasers, which are used as optical sources in such systems, exhibit nonlinear characteristics. Nonlinearity degrades the performance of such transmission systems. For nonlinearity compensation, nonlinear predistortion may be incorporated prior to the laser. Characteristics of this nonlinear block invert those of the laser source. Performance of the radio subcarrier multiplexed system with and without predistortion is evaluated by harmonic and intermodulation distortions analyses. Nonlinear distortion level decreases significantly when predistortion is employed prior to the laser. This enhancement results in system requirements on carrier-to-noise ratio being met for FM, 4-level QAM and HDTV (Zenith proposal) radio subcarriers. This amount of increase in carrier-to-noise ratio is a function of the optical modulation index.