In this paper, performance analysis of multi-level quadrature amplitude modulation (M-QAM) systems with Alamouti space-time transmit diversity (STTD) in Rayleigh fading channels is analytically studied. The effect of self-interference (interference from another simultaneously transmitted symbol in the STTD from the same user) due to imperfect channel estimation is investigated. Based on the characteristic function method, an analytical bit error rate (BER) is presented in a closed form. Numerical results for M-QAM show that with Alamouti STTD technique, the BER performance of the M-QAM system improves significantly. In addition, the effect of receive antenna diversity is investigated. It is shown that high-level QAM can be employed even in low signal to noise ratio (SNR) with the STTD technique in conjunction with the receiving antenna diversity technique.