An experimental terrestrial link was set up for the purpose of evaluating very-high-data-rate communications in dual-polarization frequency reuse systems. Possible applications are in the field of satellite communications. Two 3.2-Gb/s signals using staggered quadriphase shift keying (SQPSK) were transmitted on opposite senses of circular polarization over a 7-km path located in Crane rain region D3. Performance degradation of the demodulator as a function of cross-polarization discrimination (XPD) was evaluated and found to closely match simulation predictions. However, the relationship between XPD and rain attenuation was found to be more complex than thought previously, displaying a relatively slowly varying hysteresis effect as well as significant interactions with characteristics of the receive antenna. The latter effect suggests that careful control of antenna characteristics may be required if such high-data-rate techniques are to be employed in space-ground links.>