In this paper, a pulse positioned-differential phase shift keying technique is proposed to enhance the data rate in free space optical communication. Using the schematics of polarization rotation differential phase shift keying, multi-rate functionality can be achieved without using delay-line interferometers. Furthermore, the proposed novel modulation format-differential phase shift keying combined with pulse-position modulation-enables a high data rate owing to the use of an average power limited amplifier. By using the average power limited amplifier, the signal power is increased as the pulse position order increases, which enhances the bit-error-rate performance. The increased signal power can be converted to an enhanced data rate. We demonstrated that the data rate above 625 Mbps can be increased in every step, as the pulse position order increases in the pulse positioned-differential phase shift keying. The performance enhancement of the proposed technique is theoretically and experimentally demonstrated.