System and method for dynamically assigning wavelengths wavelength division multiplex ("WDM") ring networks is described. In one embodiment, the invention comprises a method for dynamic wavelength assignment on a ring in a WDM network comprising, for each new requested traffic flow from a source node to a destination node on the ring, for each segment on a path around the ring between the source and destination nodes, classifying the new requested traffic flow into one of a set of spatial relationship types for each existing wavelength; determining a corresponding number of optical-to-electrical and electrical-to-optical ("OEO") interfaces needed for each spatial relationship type selected for each segment; determining the total number of OEO interfaces needed for the entire path between the source and destination nodes along the ring; and selecting the existing wavelengths that minimize the OEO interfaces.