We experimentally demonstrated phase-noise-tolerant 20-Gbit/s QPSK self-homodyne transmission over 80km using a spectrum-sliced lightwave from an inexpensive Fabry-Perot laser diode (FP-LD).We employed an optical phase-noise cancellation technique based on self-homodyne detection using a polarization-multiplexed pilot-carrier. A BER of < 10 ^-8 after 80-km transmission was successfully attained without using error correction. To the authors' best knowledge, this is the first experimental demonstration of multi-level modulation/demodulation using an FP-LD.