The encoding/decoding scheme based on Fiber Bragg Grating (FBG) for Optical Code Division Multiple Access (OCDMA) system is analyzed and the whole process from transmitting end to receiving end is researched in detail. The mathematical mode including signal transmission, summing, receiving and recovering are established respectively. One of the main sources of Bit Error Rate (BER) of OCDMA system based on FBGs is the unevenness of signal power spectrum, which leads to the chip powers unequal with each other. The Signal to Interfere Ratio (SIR) and BER performance of the system are studied and simulated at the case with uneven distribution of chips powers.