Abstract: A free space point-to-point signaling system is described in which optical beams generated by two free space transceiver units are optically aligned with each other using beam steering techniques. Once aligned, each transceiver unit detects the received signal strength and transmits this information to the other transceiver unit. This information is used by the other transceiver unit to vary the signal strength of the beam that it transmits and to optimise the alignment between the light beams transmitted by the two transceiver units. The determined received signal strength measure is also used to detect if the two transceiver units have become misaligned or if the beams have been interrupted, so that the transmission power can be reduced if necessary or so that the alignment procedure can be restarted.