The paper proposes a novel pilot-symbol-aided (PSA) technique for fading compensation of digital signals in the mobile environments. In a PSA system, the data sequence at the transmitter is divided into frames of data. A pilot symbol from a known pseudoradom-symbol sequence is inserted periodically into a frame of data symbol for transmission. In a conventional PSA-receiver, these pilot symbols are extracted from the received signal and used to estimate the effects of signal distortion introduced in the fading channel. The resultant estimates are then used to correct the distortion effects in the received data frames. In the paper, a novel estimation technique that uses the data symbols as well as the pilot symbols is proposed. The technique has the major advantages of simple implementation and short storage-delay time. Results are presented in a series of computersimulation tests. These assess the effectiveness of the estimation technique on the BER performances of a 16-ary phase-shift keyed (16PSK) and a 16-ary quadrature-amplitude modulated (16QAM) signals in the frequency-selective and frequency-nonselective Rayleigh fading channels. The channels are corrupted by co-channel interference or additive white Gaussian noise. Results of differential-detected 16PSK and star-16QAM signals are also presented for comparison. It has been shown that, the use of PSA technique can significantly improve the bit-error-rate performances of the systems, relative to those using differential detection.