Abstract-A modulating retroreflector (MRR) is used for 1 a free-space optics (FSO) implementation of the MIL-STD-1553 protocol. A multiple quantum well (MQW) pi-n structure is used for a single device that acts both as a modulator for transmitting data and as a photodiode for receiving data. A master node and two slave nodes with cat's eye retroreflectors were designed using COTS optics. Two-way communication using the 1553 protocol is demonstrated at a separation of 3 meters, using widely available 980 nm pump lasers. The link was closed using only 15 mW of laser light. We have also demonstrated a coherent receiver to increase sensitivity and quadrature amplitude modulation (QAM) to enhance the data rate of a bandwidth-limited MRR.