Techniques to improve the BER performance of 16-level QAM transmission over Rayleigh fading channels for PCN systems are presented. Simulations were carried out with a carrier frequency of 1.9 GHz, data rate of 64 kbit/s and mobile speed of 30 mph. The residual BER was reduced by over an order of magnitude, by introducing a circular constellation coupled with differential amplitude and phase encoding, compared with a square QAM constellation. When an oversampling and interpolation technique was combined with the circular constellation with differential encoding another order of magnitude reduction in residual BER was obtained. Decreasing the data throughput to 48 kbit/s using a /sup 3///sub 4/ rate RS(60,44,12) code, 16-level QAM, interleaved over 40 ms yielded a BER of 10/sup -6/ for channel SNRs above 25 dB.<<ETX>>