Providing a reliable link, with sufficient signal-to-noise ratio (SNR) and bandwidth to deliver high-capacity communications is a critical challenge for optical wireless (OW) communications and understanding and jointly optimizing the performance of the transmitter and receiver subsystems is a key part of this. At the transmitter a source of light, either a laser or a light-emitting diode, must be modulated with the communications signal. The resulting emission must be directed, using optics or steering systems, as required for the particular application, and must be within any safety levels set by relevant standards. The receiver is the most critical part of any optical link, as its design is a dominant factor in determining the received SNR, which determines the capacity and ultimately the utility of the link. A receiver must collect, filter and concentrate signal radiation, then detect and amplify the resulting electrical signal. This review surveys the state-of–the-art transmitter and receiver technologies. Details of design constraints are discussed, and potential future directions discussed. This article is part of the theme issue ‘Optical wireless communication’.