Optical code division multiple access (OCDMA) is a multiplexing technique that has a number of inherent advantages that make it suitable for use in passive optical networks, such as allowing subscribers to transmit information in an asynchronous fashion over a single optical fibre. This form of multiplexing can provide a higher degree of flexibility and simplicity in comparison to other techniques. However, due to the asynchronous nature of transmission, OCDMA networks suffer from multiple access interference (MAI) and optical beat noise which severely impairs system performance. A number of solutions have been proposed to mitigate these noise sources. Increasing the optical code lengths used can reduce the level of optical beat noise, however this is generally at the expense of transmission speed and increased transmitter complexity. MAI suppression can be achieved through the use fibre-based nonlinear thresholders or optical time-gating. One problem with these solutions is the requirement of long lengths of nonlinear fibre that are susceptible to changes in environmental conditions. Therefore, this thesis focuses on the development and testing of a nonlinear optical receiver based on semiconductor devices for the suppression of noise in OCDMA systems. The nonlinear optical process of two-photon absorption (TPA) in a commercially available 1.3 micron Fabry-P´erot laser is investigated as a method for optical thresholding in an OCDMA system. It is shown that the use of a saturable absorber (SA) directly before the TPA-based detector can provide additional suppression of MAI noise. However, the level of beat noise that is present on the optical signal can be increased due to the nonlinear responses of both devices. As a result, a gain-saturated semiconductor optical amplifier (SOA) is demonstrated as a method for the reduction of optical beat noise. It is shown that error-free performance can be achieved in an optical testbed designed to simulate an OCDMA system using an SA-SOA-TPA-based receiver. The performance improvement due to the suppression of MAI and beat noise using an SA-SOA receiver is examined in relation to a current fibre-based thresholding technique; a Mamyshev filter. It is shown that the SA-SOA receiver can offer a similar level of improvement when compared to the performance of a Mamyshev filter.