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In this paper we experimentally demonstrate a novel, high phase-noise tolerant, optical dual polarization (DP) quadrature phase-shift keying (QPSK) communication system based on pilot-tone-aided phase noise cancellation (PNC) algorithm. Vertical cavity surface emitting lasers (VCSELs) with approximate 300 MHz linewidth are used as transmitters and local oscillators for coherent detection of optical DP-QPSK signals. The proposed system, with central wavelength at 1540.68 nm, operates at 40 Gb/sdoi:10.1364/oe.20.019990 pmid:23037051 fatcat:gb56me572rdkbkz2foopav7nli