We demonstrate an all-optical wavelength converter with multicasting at 4 x 10 Gbits/s up and down conversion using gain modulation in an FP-LD. We also explain the gain modulation technique using the bistability behavior of the injection locked FP-LD. The wavelength converter shows the average power penalty of 1.5 dB at a bit error rate of 10(-9) and the extinction ratio of outputs over 12 dB, both for up and down conversions.