Theoretically, we analyse the dispersion compensation characteristics of the chirped fibre grating (CFG) in an optical fibre cable television (CATV) system and obtain the analytic expression of the composite second-order (CSO)distortion using the time-domain form of the field envelope wave equation. The obtained result is in good agreement with the numerical simulation result. Experimentally, we verify the result by making use of the tunable characteristics of CFG to change the dispersion compensation amount and obtain an optimal CSO performance in a 125km fibre transmission link. Both the theoretical and experimental results show that the CSO performance can be improved by properly choosing the dispersion compensation amount for a certain fibre transmission link.