Bit error rate (BER) performance for modulating retro-reflector (MRR) free space optical communication (FSOC) system with an adaptive threshold over correlated gamma-gamma fading channel is investigated. In order to do this analysis, we first derive two closed form expressions for the probability density function of the correlated MRR channel and our instantaneous BER using the optimal adaptive threshold without channel state information (CSI). Then based on these results, we develop a closed form expression for the average BER in the infinite series form whose convergence is confirmed by Cauchy's ratio test. Simulation results show that we can achieve small SNR penalty of 0.32 dB between our system and the system with CSI by constructing our adaptive threshold using 3 bit pilot data corresponding to a slight throughput reduction.