We analyze the improvements obtained in wireless infrared (IR) communication links when one replaces traditional single-element receivers by imaging receivers and diffuse transmitters by multibeam (quasi-diffuse) transmitters. This paper addresses both line-of-sight (LOS) and nonline-of-sight (non-LOS) IR links. We quantify link performance in terms of the transmitter power required to achieve a bit error rate (BER) not exceeding 10(-9) with 95% probability. Our results indicate that in LOS links, imaging receivers can reduce the required transmitter power by up to 13 dB compared to single-element receivers. In non-LOS links, imaging receivers and multibeam transmitters can reduce the required transmitter power by more than 20 dB. Furthermore, we discuss the use of multibeam transmitters and imaging receivers to implement space-division multiple access (SDMA). In a representative example with two users. transmitting at a power sufficient to achieve a BER not exceeding 10(-9) with 95% probability in the absence of cochannel interference, when SDMA is employed, the system can achieve a BER not exceeding 10(-9) with a probability of about 88%.