A hybrid fibre and free space optical (FSO) communication link using digital pulse position modulation (DPPM) in a wavelength division multiplexing (WDM) system is proposed. Such a system, which could provide a power efficient, robust and flexible solution to high speed access networks, is a contender for a passive optical network (PON) solution and could readily be deployed in areas with restrictions in optical fibre installation, or alternatively as a disaster recovery network. However, the effects of interchannel crosstalk, which is common in WDM systems, and atmospheric turbulence-induced scintillation, limit the performance of such system. Both impairments, which could combine in some cases to further degrade the system performance, are investigated here. Specifically, the symbol error probability, the required optical transmission power and power penalties are derived. Furthermore, the required performance of the demultiplexers in terms of adjacent channel rejection is studied with respect to the FSO link length. A simple relationship between the turbulence attenuation and crosstalk 2 is derived to facilitate demultiplexer selection in the design and analysis of practical systems without forward error correction (FEC) coding. Results also show that DPPM systems are more power efficient than OOK systems in the presence of crosstalk accentuated by atmospheric turbulence.