For communication in space, information transmission lines are critical for reaching the whole world. A long delay and a poor data transfer rates have been observed in radio frequency (RF) communication and therefore inter-satellite communication has become more common in recent years and optical wireless communication has advanced dramatically. Owing to its multiple advantages, including large channel bandwidth, high-speed connectivity and economical operations, IsOWC technology is becoming popular among researchers. Uniphase modulations such as NRZ modulation does not have efficient spectrum for high speed inter-satellite communication. PDM-256-QAM at 160 Gbps over IsOWC channel is demonstrated in this work using matched filter and DSP. Proposed system is investigated for PDM-256-QAM at 850 and 1550 nm wavelength and results analyzed in terms of Q factor, log symbol error rate (SER) and error vector magnitude (EVM).