We demonstrate the first 40 Gbit/s single-channel polarizationmultiplexed, 5 Gsymbol/s, 16 QAM quantum noise stream cipher (QNSC) transmission over 480 km by incorporating ASE quantum noise from EDFAs as well as the quantum shot noise of the coherent state with multiple photons for the random masking of data. By using a multi-bit encoded scheme and digital coherent transmission techniques, secure optical communication with a record data capacity and transmission distance has been successfully realized. In this system, the signal level received by Eve is hidden by both the amplitude and the phase noise. The highest number of masked signals, 7.5 x 104, was achieved by using a QAM scheme with FEC, which makes it possible to reduce the output power from the transmitter while maintaining an error free condition for Bob. We have newly measured the noise distribution around I and Q encrypted data and shown experimentally with a data size of as large as 225that the noise has a Gaussian distribution with no correlations. This distribution is suitable for the random masking of data.