A self-homodyne laser communication system based on orthogonally polarized binary phase shift keying is demonstrated. The working principles of this method and the structure of a transceiver are described using theoretical calculations. Moreover, the signal-to-noise ratio, sensitivity, and bit error rate are analyzed for the amplifier-noise-limited case. The reported experiment validates the feasibility of the proposed method and demonstrates its advantageous sensitivity as a self-homodyne communication system.