Free-Space-Optical (FSO) communication has become an attractive option over Radio Frequency (RF) communication due to having broader bandwidth, unlicensed band, higher spatial reuse, and enhanced security. In-band full-duplex FSO (IBFD-FSO) transceivers ensure, in some cases enhance, these features enabling future vision of smart communication and Internet-of-Things (IoT) applications. Even though IBFD-FSO transceivers can double the network capacity theoretically, overall performance and capacity is limited by interference and optical feedback. In this paper, we present a proof-of-concept prototype of IBFD-FSO transceiver by implementing isolation technique to reduce optical feedback. We demonstrate the effectiveness of the isolation technique and performance through test-bed experiments using off-the shelf components.