<p>This study presents a novel adaptive free-space optical (FSO) communication system that employs electro-absorption modulation (EAM) alongside multi-level pulse amplitude modulation (PAM-3, PAM-5, PAM-6) and 4 × 4 MIMO spatial diversity, specifically designed for the semi-arid climate of Kurdistan-Iraq. The system's performance was tested in several weather conditions in Erbil and Sulaimani from 2022 to 2024, with attenuation levels derived from three well known models namely Kin, Kruse and Al-Naboulsi ranging from 9.89 to 352 dB/km. The proposed system achieves significant link length of up to 5.0 km in normal weather conditions and maintains operational connectivity at distances exceeding 230 m, even under significant atmospheric attenuation of 352 dB/km. With modest attenuation (23.7–39.6 dB/km), the system can link up to 2.7–1.65 km away at data rates of 80–140 Gbps and Q-factors of 90–300 or higher at short distances. The 4 × 4 MIMO design always increases the range by 10–23%, while PAM-3 modulation is exceptionally effective in adverse weather, reaching 1. 05 km at 65.4 dB/km attenuation. Results show that 80Gbps PAM-3 performs 80% better in dense fog scenarios because it separates symbols better than the higher order amplitude levels, even if higher-order modulation schemes (PAM-5, PAM-6) are better at using the spectral width enabling 126 and 140 Gbps. The adaptive modulation system makes it possible to switch between formats in real time based on OSNR thresholds (23–25 dB for different PAM orders). This ensures the best spectral efficiency while maintaining the BER below 10⁻⁹. This study demonstrates that the proposed EAM-based adaptive m-level PAM with MIMO FSO system offers a feasible, energy-efficient solution for high-capacity wireless backhaul in regions where traditional fiber infrastructure installation poses challenges, particularly enhancing last-mile connectivity in semi-arid settings.</p>