The performance of wireless optical MIMO system with multiple pulse position modulation (MPPM) over correlated fading channel is investigated. The combined effects of atmospheric attenuation, atmospheric turbulence, and pointing error are taken into consideration. The bit error rate (BER) and the ergodic channel capacity are analyzed by utilizing the Poisson counting model and the exponential correlation model. Moreover, their approximate expressions are derived. The simulation results demonstrate that the pointing error is the most prominent influence factor over weak correlated channel. The performance degradation caused by a high channel correlation coefficient is more than that of pointing error in strong correlated channel. Therefore, the use of pointing, acquisition, and tracking (PAT) system and reasonable arrangement of the number and spacing of antennas at the transceiver are the keys to improve system performance.