Abstract-In this paper, the authors derive the moment generating function (MGF) of the decision variable for a practical optical differential quadrature phase shift keying (DQPSK) receiver affected by phase noise and the amplifier spontaneous emission noise. The effect of the different optical filters, Gaussian, Fabry-Pérot (FP), and optical integrator, on the phase noise is examined. Using the saddle point approximation, the authors obtain numerically the bit error rate (BER) for the above system, as a function of the optical-signal-to-noise ratio (OSNR) and the source linewidth. The model is found to agree with previous published simulation results and the Monte Carlo simulations presented in this paper. The authors also calculate the BER floors for DQPSK inflicted by the phase noise and compare its performance with differential phase shift keying (DPSK). Finally, the authors examine the effect of interferometric demodulation on the relative intensity noise (RIN) spectra and the impact on the DQPSK system performance. In particular, the authors examine the influence of system dispersion on the receiver sensitivity.Index Terms-Differential phase shift keying (DPSK), moments method, optical communication.