Data carrying optical signals (16) are subjected to equalisation or pulse shaping of the optical signal waveform. A plurality of optical tap signals (20,21) derived from the optical signal are used to control a modulator (5) operating on an input signal (50) to provide an output signal (22) having the desired waveform (D). A Mach-Zehnder interferometer (5) having semiconductor optical amplifiers (8,9) in each arm (6,7) provides modulation by the effect of cross modulation induced by propagating the respective tap signals through a selected one of the semiconductor optical amplifiers. Various forms of transversal filter are provided by selecting the number of optical taps, assigning positive or negative weights and appropriate delays. The effects of dispersion in optical signals can be mitigated by utilising optical taps with negative weights to subtract tail portions from the leading and trailing edges of a signal pulse. The invention has application to systems with high bit rates where equalisation or pulse shaping in the electrical domain is difficult to implement.