Homophobia is defined as a negative attitude towards GLBT people that manifest themselves through anxiety, disgust, aversion, anger, discomfort or fear or GLBT people or of homosexuality in general.
Heterosexism is the assumption that heterosexism is inherently normal and superior to homosexuality and that everyone is or should be heterosexual. Heterosexism infuses most social institutions in the United States and many individuals' everyday actions. A non-heterosexism approach to others makes no assumptions about their sexuality.
Homophobia is often the basis of violence and other aggression against GLBT people (including political action.) Internalized homophobia occurs when GLBT people believe that their lifestyle is unacceptable and they develop anxiety, shame or fear about it.
Heterosexism is more subtle, but affects GLBT people when they feel or perceive that their lifestyle is being evaluated of judged as inferior to heterosexual lives.