© 1965-2012 IEEE. The impact of nonlinear phase noise on all-optical wavelength conversion using four-wave mixing and dual-correlated pumps is studied. It is shown that there are optical signal-to-noise ratio requirements on the dual-correlated pumps for penalty-free all-optical wavelength conversion. We also show that the nonlinear phase noise generated in the nonlinear medium is transferred to the idler because of the uncorrelated nature of the amplitude noise on the pump signals.