We present and experimentally characterize a spectrally efficient, bidirectional, ultradense wavelength-division multiplexing passive optical network (PON) (2 × 120 Gb/s at 50 GHz) over 30 km standard single-mode fiber. This is achieved using a 4 GHz grid with partial spectrum overlapping, Nyquist-shaped 16-ary quadrature amplitude modulation, and digital frequency shifting. This scheme is based on a laserless, self-homodyne PON with centralized wavelength control. We achieve reduced impact of the Rayleigh back-scattering effect due to Nyquist-pulse shaping and frequency upshifting. Self-homodyne detection relaxes the laser linewidth requirement and digital signal processing complexity at the optical network unit. To demonstrate the extra benefit of the proposed PON system, we also experimentally and theoretically evaluate the impact of nonlinear Raman crosstalk in video overlay. Compared to a baseband Nyquist signal and baud rate non-return-to-zero equivalent, the proposed system improves the carrier-to-Raman crosstalk ratio of video overlay by 4 and 6 dB, respectively.