A 2n-QAM (e.g. 16-QAM) optical modulator comprising cascaded I-Q modulators. The first I-Q modulator applies 2n−2 (e.g. 4) QAM to an optical signal, having a constellation diagram with the 2n−2 (e.g., 4) constellation points located in quadrant I. The second I-Q modulator subsequently applies a quaternary phase-shift keying (QPSK) modulation scheme to the optical signal, thereby rotating the constellation points of the 2n−2-QAM modulation scheme to quadrants II, III and IV, to produce a 2n-QAM modulation constellation diagram. The rotation causes the 2n-QAM modulator to inherently apply four quadrant differential encoding to the optical signal. A method of 2n-QAM optical modulation is also provided and optical signal transmission apparatus comprising the 2n-QAM optical modulator.