According to one embodiment of the invention, a 16-QAM optical modulator has a Mach-Zehnder modulator (MZM) coupled to a drive circuit that drives the MZM based on two electrical binary signals. The output of the MZM corresponds to an intermediary constellation consisting of four constellation points arranged on a straight line in the corresponding in-phase/quadrature-phase (I-Q) plane. Two of these constellation points correspond to a zero phase, and the remaining two constellation points correspond to a phase of &pgr; radian. The 16-QAM optical modulator further has a phase shifter that modulates the output of the MZM based on two additional electrical binary signals. The resulting optical output signal corresponds to a star 16-QAM constellation, which is produced by incremental rotation of the intermediary constellation.