It is known that the Differential Phase Shift Keying (DPSK) modulation scheme in the coherent optical communication system is suitable for design of long-distance transmission system because its receiver performance is 3-5dB better than ASK and FSK. In this paper, we descrive a fundamental understanding of the effects of laser phase noise on the performance of coherent lighwave communication systems. Formulas are derived for the bit error rate in homodyne and heterodyne DPSK. Based on detailed mathematical analysis and estimates, we explain the following finding. DPSK can operates at rates only 300 times greater than the laser linewidth.