In this paper using nested Rectangular resonator we have designed an add-drop filter based on photonic crystal structures suitable for optical communication applications. The drop efficiency and the quality factor of our proposed filter is 100% and 2508. In this filter the quality factor is significantly improved with respect to other published reports. The simulation results are obtained using 2D Finite Difference Time Domain (FDTD) method. The Photonic Band gap (PBG) is calculated by Plane Wave Expansion (PWE) method.