Optical interconnects are considered a promising solution for long distance and high bitrate data transmissions, outperforming electrical interconnects in terms of loss and dispersion. Due to the bandwidth and distance advantage of optical interconnects, longer links have been implemented with optics. Recent studies show that optical interconnects have clear advantages even at very short distances - intra system interconnects. The biggest challenge for such optical interconnects is the alignment tolerance. Many free space optical components require very precise assembly and installation, and therefore the overall cost could be increased. This thesis studied the misalignment tolerance and possible alignment correction solutions for optical interconnects at backplane or board level. First the alignment tolerance for free space couplers was simulated and the result indicated the most critical alignments occur between the VCSEL, waveguide and microlens arrays. An in-situ microlens array fabrication method was designed and experimentally demonstrated, with no observable misalignment with the waveguide array. At the receiver side, conical lens arrays were proposed to replace simple microlens arrays for a larger angular alignment tolerance. Multilayer simulation models in CodeV were built to optimized the refractive index and shape profiles of the conical lens arrays. Conical lenses fabricated with micro injection molding machine and fiber etching were characterized. Active component VCSOA was used to correct misalignment in optical connectors between the board and backplane. The alignment correction capability were characterized for both DC and AC (1GHz) optical signal. The speed and bandwidth of the VCSOA was measured and compared with a same structure VCSEL. Based on the optical inverter being studied in our lab, an all- optical flip-flop was demonstrated using a pair of VCSOAs. This memory cell with random access ability can store one bit optical signal with set or reset beam. The operating conditions were studied to generate two stable states between the VCSOA pair. The entire functionality test was implemented with free space optical components