In classical asymmetrically clipped optical orthogonal frequency division multiplexing (ACO-OFDM) system, we first introduce constant amplitude zero auto correlation (CAZAC) equalization to reduce its high peak to average power ratio (PAPR). To further improve the performance of PAPR reduction, we combine CAZAC with the existing clipping scheme, and we call it CAZAC-clipping scheme. In the frequency domain, CAZAC changes the phase distribution, and reduces the probability of in-phase combination. In the time domain, clipping clips all the values which larger than the predetermined peak threshold. The simulation results demonstrate that both the PAPR reduction and the bit error rate (BER) performance of our proposed scheme show well. Moreover, the computation complexity is low.