The performance of polarization division-mul tiplexing (PDM) differential phase-shift keying (DPSK) modulated signal transmission over a slow varying turbulence channel is estimated in this paper. The turbulent free space optical channel is simulated using a stochastic differential equation (SDE)-based numerical channel simulator that takes into account the temporal correlation effect of the channel. The SDE-based channel simulator model may significantly ease the free space optical (FSO) communication system design since it enables the simulation of channel states according to predefined first-and second-order statistics, namely channel distribution and auto-covariance. We report the performance comparison of the PDM-DPSK system over an uncorrelated fast-varying FSO channel and a time-correlated slow-varying channel. Furthermore, to incorporate the effects of polarization and phase fluctuations in the FSO link, both time-dependent and Gaussian-distributed, simulated using SDE methods. The bit error rate (BER) performance obtained from the numerical simulation of the PDM-DPSK system shows that the impact of intensity fluctuations is more severe than polarization and phase fluctuation. The power penalty relative to back-to-back (B2B) is 0.5 dB, 2.5 dB, and 7 dB for a 1 km FSO link to achieve a threshold BER of 10 −3 for weak, moderate, and strong turbulence