In free space optical communication link based on cat-eye modulating retro-reflector,incident light is modulated by retro-reflector,and it is retraced to the transmitter by the same light path,so search,capture and tracking system is used only in one end. Compared with traditional terminal,it has the characteristics of light weight,low energy consumption,low cost,flexible networking. Firstly,free space optical communication principle based on cat-eye modulating retro-reflector was analyzed,and the function and characteristics of cat-eye optical system and retro-reflector modulators were introduced. Cat-eye optical system optimization method,multiple quantum well absorption modulator and MEMS modulator were emphatically introduced. Finally,the performance of MEMS modulator was tested.