Abstract. This paper illustrates the challenges imposed by the atmospheric channel on the design of a terrestrial laser communication link. The power loss due to scattering effect is described using the Kim/Kruse scattering model while the effect and the penalty imposed by atmospheric turbulence is highlighted by considering the bit error rate (BER) of an On-Off Keying modulated link in an optical Poisson channel. The power loss due to thick fog can measure over 100 dB/km while snow and rain result in much lower attenuation. We show that non-uniformity in the atmospheric temperature also contributes to performance deterioration due to scintillation effect. At a BER of 10-4, for a channel with a turbulence strength of>0.1, the penalty imposed by turbulence induced fading is over 20 photoelectron counts in order to achieve the same level of performance as a channel with no fading. The work reported here is part of the EU COST actions and EU projects.