AbstractOptical wireless communication in space is attracting great consideration due to high speed, high capacity, no EMI, high security, and wide bandwidth. OWC has edge over microwave communication because in laser based communication, relay feature saves the time of the system. In this paper, different interference reduction techniques in wavelength division multiplexing based inter-satellite optical wireless system are presented at different data rates 10, 20, and 40 Gbps. Hybrid multiplexing using wide division multiplexing and time division multiplexing is proposed first and second technique proposed is polarization interleaving in IsOWC systems. Dense channel spacing system with diverse modulations is investigated further such as Chirped, differential phase shift keying, and alternate mark inversion (AMI). Q factor is the performance evaluation parameters for different distances.