A free-space optical communication link is proposed that utilizes phase-sensitive amplification of the received optical signal at the input to the receiver portion of the link. The transmitter component of the FSO link generates an idler signal that is transmitted through free space with the original data signal and used at the PSA in conjunction with a pump wave to impart gain onto the received information signal. The PSA performs four-wave mixing (FWM) of the data, idler and pump to create the amplified data signal. In one embodiment, the pump wave used to generate the idler at the transmitter is sent through free space with the information and idler signals and used by the PSA to perform amplification. Alternatively, the PSA may use a co-located pump laser, in combination with the received idler signal, to perform the phase-sensitive amplification process.