This paper attempts to study the impact of wavelength converters in WDM wavelength routed all-optical networks. A new heuristic approach for placement of wavelength converters to reduce blocking probabilities is explored. Multihop virtual topology is designed to minimize the number and overall cost of the converters. Blocking probabilities for static lightpath establishment (SLE) and dynamic lightpath establishment (DLE) are analyzed. In the case of SLE, arranging lightpaths in ascending order of their path length reduces blocking probability. Wavelength converters placed at nodes with high nodal degree further reduces the blocking probabilities. Simulation studies performed on a 28-node USA long haul network and a 20-node arbitrary mesh network, validate the above observations. © 1998 IEEE.