Optical fade caused by atmospheric turbulence impairs the performance of optical communication through atmosphere. Adaptive techniques of signal detection, power control, and channel coding can be employed to reduce the degrading effect of this phenomenon. For implementation of these techniques, the knowledge of channel state is required. This paper develops a channel estimator to extract the strength of optical fade from the observations of channel output. Further, it is shown how to incorporate this estimation in an adaptive threshold test for the purpose of optimal binary signal detection.