In this paper, an advanced A-law nonlinear companding algorithm is employed to reduce the nonlinear distortions from the light emitting diode (LED) on visible light communication (VLC) systems. The nonlinear transfer characteristics of LEDs are not identical. But the transfer effect of an LED can be modeled as a linear transfer range with the maximum and minimum forward voltages. Therefore, the signal will be truncated when the signal amplitude is larger than the maximum limit or smaller than the minimum limit. The advanced A-law companding algorithm can concentrate the signal amplitude to the limited linear transfer range and decrease the truncation distortion. We evaluate the performance of the proposed advanced A-law companding algorithm comparing with typical A-law and uncompanded schemes via simulations in the direct current biased optical orthogonal frequency division multiplexing (DCO-OFDM) system. Experimental results demonstrate that the advanced A-law companding algorithm can effectively alleviate the nonlinear distortion of the DCO-OFDM system in terms of system bit error ratio (BER) performances.