The present invention provides for a system and method for an optical communication system that utilizes an optical modulator as an optical correlator in a receiver. The present invention may be used as a correlator in a receiver for an On-Off Keying (OOK) system or for a Differential Phase Shift Keying (DPSK) system. A correlation modulator is followed by a low pass filter, which together act as a correlator to determine the correlation of the received waveform with possible transmitted waveforms to produce a maximized signal-noise ratio. The result is a high data rate communication system and method that approaches the theoretical performance limit.