To investigate the influence of non-linearity in the bidirectional optical link which enables simultaneous uplink and downlink transmission of 16-QAM data signal. We analyze non-linear effects like self-phase modulation (SPM) and stimulated Brillouin scattering (SBS). The performance limitation due to the non-linear effects in the system is analyzed. The analysis shows that the SBS threshold for launch power is 16 dBm for unmodulated carrier signal and 6 dBm for modulated signal. At 6 dBm launch power, the system has an average Q of 44.