Satellite laser communication concepts have been under development for many years. The conventioanl approaches require sophisticated hardware and considerable spacecraft resources introducing concerns about cost, added weight, power consumption, and reliability. An optical tranceiver based on a modulating retroreflector is a relatively new concept which has not been explored for space communications. The majority of the hardware and complexity for such a communications link is located on the ground and only minimal spacecraft hardware is required. This technique can provide a modest telemetry link for spacecraft in low earth orbits while consuming negligible spacecraft resources when compared to a traditional RF system. A prototype for such a low power optical tranceiver has been constructed and tested over a 4 km ground path in preparation for a high altitude balloon demonstration. Presented here is an overview of the retromodulator communications concept, a link design, and results from prototype testing.