This paper investigates the design optimization of digital free-space optoelectronic interconnections with a specific goal of minimizing the power dissipation of the overall link, and maximizing the interconnect density. To this end, we discuss a method of minimizing the total power dissipation of an interconnect link at a given bit rate. We examine the impact on the link performance of two competing transmitter technologies, vertical cavity surface emitting lasers (VCSEL's) and multiple quantum-well (MQW) modulators and their associated driver-receiver circuits including complementary metal-oxide-semiconductor (CMOS) and bipolar transmitter driver circuits, and p-n junction photodetectors with multistage transimpedance receiver circuits. We use the operating bitrate and on-chip power dissipation as the main performance measures. Presently, at high bit rates (>800 Mb/s), optimized links based on VCSEL's and MQW modulators are comparable in terms of power dissipation. At low bit rates, the VCSEL threshold power dominates. In systems with high bit rates and/or high fan-out, a high slope efficiency is more important for a VCSEL than a low threshold current. The transmitter driver circuit is an important component in a link design, and it dissipates about the same amount of power as that of the transmitter itself. Scaling the CMOS technology from 0.5 m down to 0.1 m brings a 50% improvement in the maximum operating bit rate, which is around 4 Gb/s with 0.1 m CMOS driver and receiver circuits. Transmitter driver circuits implemented with bipolar technology support a much higher operating bandwidth than CMOS technology; they dissipate, however, about twice the electrical power. An aggregate bandwidth in excess of 1 Tb/s-cm 2 can be achieved in an optimized free-space optical interconnect system using either VCSEL's or MQW modulators as its transmitters.