In order to investigate the propagation characteristics of rectangular pulse laser in atmosphere,a mathematical model of pulse signal propagation in atmosphere is established and a compensation algorithm for channel is proposed. A propagation experiment of 100 MHz rectangular pulse is carried out between two buildings with a distance of 6.2 km, and the compensation algorithm for channel is verified by FPGA compliling software. The experimental results indicate that the pulse signal is distorted after passing through the atmospheric channel. The performance of atmospheric channel can be considered as a low-pass system in the frequency domain and signals with high frequency larger than 430 MHz are suppressed. With the channel compensation algorithm, the distortion of rectangular optical pulse is suppressed effectively, the system bandwidth is improved, and the signal noise ratio is increased by 5 times. The bit error rate decreases to about 10 ^-6 when the optical signal noise ratio is 10 dB.