In this paper, a protocol for bi-directional cooperative communications applying full-rate distributed space-time codes and physical network coding is proposed. This scheme uses L relays to transmit the codewords in a distributed fashion. It takes 3 time slots for two sources to transmit two corresponding codewords by exploiting physical network coding and self-interference cancellation at each source. We prove that this scheme obtains full diversity. The analytical results show that the diversity order of this scheme will be L + 1, where L is the number of relays. In addition, we assess the sum-rate of the bi-directional cooperative communication scheme and reveal that it achieves larger spectral efficiency compared to one-way cooperative communication scheme. We employ Monte Carlo simulations to validate the symbol error rate and the ergodic sum-rate of the scheme.