A proposed fractional Fourier domain communication system (FrFDCS) using transform domain processing is demonstrated as having enhanced interference avoidance capability under adverse environmental conditions. The basic idea for this system is to synthesize an intelligent adaptive waveform in the fractional Fourier domain at both the transmitter and receiver for avoiding spectral crowded regions. This approach offers better bit error performance in contrast to other conventional interference mitigation techniques which process the signal at the receiver only. Moreover, since this smart waveform is able to search ldquospectrum holerdquo and adapt to electromagnetic environment, it could be a potential candidate in cognitive radio technology. The FrFDCS and its response to interferences are modeled and simulation results are obtained. Compared to similar systems such as the transform domain communication system (TDCS), the results indicate that the proposed FrFDCS is a viable option for interference avoidance communications.