The coherent optical orthogonal frequency division multiplexing (OFDM) system based on polarization diversity is proposed. However, the coherent detection is very sensitive to phase noise and the polarization diversity reception can produce additional multiplicative phase noise. Therefore, a phase noise cancellation scheme based on digital signal processor with coherent optical OFDM system is proposed. Error-free transmission of an 8 Gbit/s 16 quadrature amplitude modulation OFDM signal over a 100 km single mode fiber is experimentally demonstrated. After the coherent detection, the phase noise through digital signal processing is cancelled, and the experimental constellation diagrams of the signals after phase noise cancellation is analyzed. In addition, the coherent optical OFDM link based on polarization diversity after phase noise cancelling is compared with other coherent optical OFDM link as the advantage of this scheme is verified.