A mode-selective directional coupler based on titanium in-diffused channel waveguides in lithium niobate is investigated. This coupler may be utilized as a key part of an add-drop multiplexer for dense wavelength division multiplexing in optical network nodes. The proposed coupler is based on evanescent coupling of the fundamental mode of a single-mode channel to the first higher mode of a parallel bi-modal waveguide. Our experimental results show that a compact directional coupler with coupling efficiencies larger than 90%, large bandwidth around 1550 nm, and with negligible polarization dependence can be realized using electro-optic lithium niobate substrates. © Versita Warsaw and Springer-Verlag Berlin Heidelberg 2008.