In this paper, we propose a differential encoding and decoding scheme for multiband UWB systems. The proposed scheme incorporates frequency-domain differential en/decoding with the hopping multiband OFDM modulation. To capture the effect of multipath-rich clustering property of UWB channels, we characterize the pairwise error probability performance of the proposed scheme in terms of cluster and ray arrival rates. It turns out that the diversity advantage does not strongly depend on the random-clustering of UWB channels, and we can achieve the same diversity gain in different channel environments. However, the system performance relies on the clustering behavior through the coding gain. Simulation results show that the proposed differential scheme achieves good performance in the short-range line-of-sight scenarios. In addition, the jointly encoded differential multiband UWB scheme is able to yield superior performance to the uncoded coherent multiband UWB system at high SNR