Free space optical channels offer very high bandwidth that is largely unregulated. The only consideration is eye safety regulation, and this is relatively restrictive due to the near infrared wavelength band of devices typically used. These present an eye safety hazard as they can pass through the human cornea and be focused onto the retina. The laser diodes used in this band can be rendered eye safe with the use of diffusers to spread the radiation over a large emission area and angle. A holographic diffuser provides a means of diffusing the laser source efficiently whilst able to customise its radiation pattern for the desired coverage area. An 850 nm free space optical link, using a holographic diffuser is constructed and characterised. The optical link was evaluated for range and coverage at different bit rates, whilst maintaining a low bit error rate (BER) of 10/sup -9/. The link is designed to operate at a distance of 2 m or so, and could be typically used as a link between a data terminal and a ceiling mounted system. The block diagram of the optical link system is shown.