Free-space optical (FSO) communication is a wireless optical data transmission technology with a high data transmission rate. It has received much attention in recent years as it is cost-effective and has license free operation. It is line of sight free-space communication technique where optical signal severely degraded from atmospheric losses especially due to weather conditions; hence it restricts the link range and data carrying capacity. Therefore, a 16-channel ultra-dense wavelength division multiplexing–free space optics (UWDM–FSO) system each having each 10 Gb/s data rate is proposed to enhance the capacity and performance of FSO system. To authenticate the performance of the proposed system, investigation for different modulation formats such as nonreturn to zero (NRZ), return to zero (RZ), carrier suppressed return to zero (CSRZ) and duo binary (DB) are reported. Further, to reduce the atmospheric interference, multiple input multiple output (MIMO) technique is integrated into the proposed system. The outcomes of MIMO–UWDM–FSO link revealed a significant improvement in the bit error rate (BER), eye diagram and Q-factor, under different weather conditions. It is also observed that NRZ modulation formats perform better than RZ, CSRZ and DB formats.