A theoretical and experimental evaluation of optical communications systems capable of microwave bandwidths is presented. The optical transmitter, modulator, and detection techniques are discussed with respect to both direct-detection and optical heterodyne receivers, and experiments in a nonlaboratory environment are described. At the high optical power levels or photon rates which are fundamentally necessary for gigahertz instantaneous bandwidths, it is found that signal-shot-noise limited operation may be obtained with new wideband photodetectors incorporating internal gain. Direct-detection receivers are thus generally superior to heterodyne receivers in these systems. A comparison is made of the relative merits of alternative systems and their dependence on various parameters such as information capacity, range, and background illumination.