The paper studies the effects of N-branch postdetection selection diversity reception, where N = 1, 2, 3 or 4, incorporated with fading compensation on a digital satellite mobile system. The digital satellite mobile system transmits a pilot-symbol-aided 16-ary quadratureamplitude modulated (PSA-16QAM) signal over the Rician channels. A selection method that makes use of the pilot symbols to select one of the N branches in the diversity reception system for signal detection and a novel PSA technique that makes use of both the pilot symbols and data symbols for fading compensation are proposed. Computer simulation tests are used to assess the effects of the proposed techniques on the bit-error rate performances (BER) of the PSA-16QAM system in the presence of additive white Gaussian noise (AWGN) or co-channel interference (CCI) in the Rician faded channels.When frequency diversity is used, PSA-16QAM with 2-branch and 4-branch diversity reception occupies about the same bandwidths as quaternary phase-shift-keying (QPSK) without using diversity and with 2-branch diversity, respectively, yet achieving the same capacity. Thus simulation tests on the BER performances of a QPSK system without diversity and with 2-branch diversity are also carried and the results are used to determine the preferred system arrangements.