We propose a reconfigurable optical add/drop multiplexer-demultiplexer based on arrayed waveguide grating with fold-back technique in AWG. The design with 8 channels incorporates a routing network in the fold-back path to allocate optical signals for the add/drop function without disrupting other signal which improves the add/drop function, enabling the allocation of multiple signal channels. The use of the fold-back path also reduces the signal crosstalk to about −70dB. During data transmission, the eye diagram analyses indicate a bit error rate of less than 0.009for a speed up to 25Gbps.