The performance of a Reed-Solomon (RS) coded differential 16 star-QAM modulation scheme with a decision-directed estimation (DDE) technique as the channel-fading parameter in a frequency hopping (FH) system is simulated. The optimum erasure threshold for an RS decoder is obtained. It is shown that with the optimum erasure threshold a bit-error probability of 10/sup -5/ can be achieved at E/sub n//N/sub 0/=21.2 dB for using RS(63,31) and E/sub b//N/sub 0/=21.5 dB for RS(31,15).<<ETX>>