In order to achieve near-ground and multi-wavelength space-time detection of aerosol and overcome the problem of lack of selectable laser wavelength, a new type of light-emitting diode (LED) light source radar is designed using the abundant spectral characteristics of LED. The energy of LED is low, and the divergence angle is large. The output energy, divergence angle, receiver′s field angle and geometric overlap factor will affect the detection range of LED light source radar. In this paper, aiming at the characteristics of the coaxial LED light source radar system, the features and calculation methods of the geometric overlap factor are analyzed, and the influences of light source divergence angle and receiver′s field angle on the geometric overlap factor are discussed in detail. Combined with the characteristics of the LED light source, the detection capability of the radar system is simulated by US standard atmospheric model, and the light source divergence angle and receiver′s field angle are optimized. The maximum detection range is got at the certain LED energy. The LED light source radar system is built and preliminary experimental observation is completed. The experimental results show that the designed radar can receive the atmospheric echo signal at the distance of 240 m at night. It verifies the radar′s ability to detect low-level atmospheric aerosol.