A new code family has been proposed for the Spectral Amplitude Coding-Optical Code Division Multiple Access (SAC-OCDMA) networks. This new Multi Diagonal (MD) code family, proposed for SAC-OCDMA applications due to his advantage such as; the cross-correlation value still zeros in case of an increase the number of users for any weight value. Furthermore, the DCS code supports a large number of users and easy code construction. Based on the theoretical analysis MD code is shown here to provide a much better performance compared to Modified Quadratic Congruence (MQC) code and Random Diagonal (RD) code. Proof-of-principle simulations of encoding with 5 users with 10 Gbps data transmission at a BER of 1.110 13 have been successfully demonstrated together with the DIRECT detection scheme for 40 km fiber length without any amplification or side pumping. © 2011 IEEE.