- A new optical communication system exhibiting a double security level is presented. Information coding is based on combined modulation formats of two data streams over the same optical carrier. Incoherent and coherent optical encryption algorithms are presented and are theoretically analyzed. The optical encryption method is transparent to data bit rates. Furthermore, it requires "on-line" data decoding with no possibility of recording and further processing. The incoherent scheme is very practical and can be implemented in existing optical communications systems, using currently available technology. Computer experiments of the incoherent method indicate less than 25 dB of signal to noise ratio required for 10-9 bit error rate and ineligible information decoding time of more than 10 8 years.