Aiming at the modulation problem of high energy efficiency and high sensitivity in the space laser communication system, the Differential Pulse Position Modulation (DPPM) format is studied and applied to the coherent optical communication system. The balance point is found in the system considering power consumption, Bit Error Ratio (BER) performance and bandwidth occupation through simulation and experiment. The experimental results show that in the direct modulation direct detection and coherent optical communication transmission systems, the optical power of the signal path required to reach the hard line is-36.5 and-60.0 dBm respectively when the same transmission channel and the same transmission rate of 1.25 Gbit/s DPPM signal is applied. The optical power margin of the coherent transmission system is increased by about 24 dB compared with the direct detection transmission system. In order to achieve the transmission goal of the hard judgment line, the optical power of the receiver for transmitting the DPPM signal at the rate of 3、6、12、24 Gbit/s needs to be about-49、-47、-42、-36 dBm respectively. It is demonstrated that higher sensitivity and lower BER can be obtained by using DPPM format/coherent detection.