We have evaluated the performance of strain-chirped fiber Bragg grating (FBG) based tunable dispersion compensator in a 40 Gb/s transmission link. In our proposed compensator, the value of dispersion could be changed from -353 ps/nm to -962 ps/nm by adjusting the rotation angle of the metal beam on which the FBG was mounted. In order to evaluate the effect of ripples in reflectivity and variations in passband of the FBG based dispersion compensator, transmission performance has been measured with our tunable dispersion compensator. Error-free transmission of a 40 Gb/s non-return-to-zero (NRZ) signal over conventional single-mode fiber (SMF) was achieved.