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We propose a novel scheme in which Yb3+ codoping and a laser cavity are introduced in Tm3+ doped fiber to achieve efficient S- band optical amplification with a 980 nm pump source. This scheme makes it possible for conventional 980 nm pump sources for Er3+ doped fiber amplifiers to be used for S- band Tm3+ doped fiber amplifiers ( TDFAs). By introducing a laser cavity into an amplifier, an internally generated pump from Yb3+ at a desirable wavelength for pumping Tm3+ could be produced. We establish and analyze, for the first time to our knowledge, a new theoretical model that takes into consideration both the internal lasing operation inside the optical amplification process and the energy transfer between the Tm3+ and the Yb3+ ions in TDFAs. Various situations such as Tm3+ doping concentration and cavity reflectivity have been investigated. The results show that high optical gain and high pump efficiency can be achieved by use of 980 nm sources. With a laser cavity of 1050 nm in Tm3+ and Yb3+ codoped fiber, for example, it is possible to achieve high optical gain of greater than 20 dB, a noise figure of approximately 5 dB in the wavelength range from 1450 to 1480 nm with a 0.3 W power at 980 nm pump source. (C) 2005 Optical Society of America.