SUMMARYIn this paper, we investigate the effect of nonlinearity in multiple input multiple output (MIMO) channels. New results on the error rate performance of several M-QAM constellations in linear and nonlinear MIMO channels are presented. The results show that for any MIMO configuration, performance degradation due to nonlinearity reduces as the fading gets more severe, and for a particular fading channel, the degradation increases as the MIMO dimension is increased. Optimum operating points for nonlinear amplifiers in MIMO channels are then reported. At these points, highly efficient utilisation of the amplifiers are achieved at minimal performance loss.