Free space optical (FSO) communication system has obtained significant importance in communication field due to its unique features: unlimited spectrum, larger bandwidth and high data rate, low mass and less power requirements, quick and easy deployability. FSO system better suits in disaster recovery, defense and last mile problems in networks, remote sensing and so on. However, FSO system has greater advantage, its performance is mainly degraded by adverse effects like beam wandering and spreading, scattering and mainly a major degradation factor is atmospheric turbulence and pointing errors which leads to severe degradation in Bit error rate (BER) and Signal to noise ratio (SNR) of the FSO link and makes the communication link infeasible. This paper gives a detailed survey on performance enhancement of FSO communication system and also discusses various channel distribution models and modulation techniques to have high reliability and FSO link availability. In this paper, the various atmospheric effects like turbulence, fog, absorption and scintillation and so on are discussed. The first part of the paper analysis the channel models and the latter part of the paper summarizes the different modulation techniques, diversity techniques and also the comparative study of the (SNR) and (BER) under various atmospheric factors of the FSO system. This survey provides the comprehensive details in order to provide low cost and high capacity FSO link design. © 2020, Springer Science+Business Media, LLC, part of Springer Nature.