Owing to AC LED can be driven directly without any AC to DC converter, the volume and the cost of AC LED can be reduced. Avoiding the power conversion loss, AC LED can have lower energy consumption and higher luminous efficiency than DC LED does. Because of high brightness, low power consumption and long lifetime, LED has been used as a lighting device and is expected to replace the high power-consuming incandescent and fluorescent lamps in the 21th century, in consequence the white light AC LED is a better choice for general illumination in the future. In this study, a white light AC LED smart lighting system equipped with visible light time-division multiplexing optical communication for free space is proposed. In the system, the timing to transmit data is synchronized with the period of the AC power on the wall, in order to keep the transmitted optical signal in an enough level. As a result, the time-division multiplexing optical communication by AC LED lighting is achieved.