This paper presents power budget predictions for retroreflective, free-space optical communication systems and examines options for producing retroreflectors with very wide field of view. Power budgets containing data representative of practical conditions show that operational ranges of many kilometres can be expected. Novel graded-index (GRIN) spherical retroreflectors have been examined in comparison with other types of retroreflector, and it is shown that they can offer technical advantages if they can be fabricated with suitable sizes and focal lengths. It is also shown that realisable high-index corner cube reflectors may be technically acceptable for this application.© (2004) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.