SUMMARYTwo practical channel estimation schemes, the moment‐based first‐and‐second moments and the simplified maximum likelihood estimators, are proposed for the MIMO/on–off keying system with square envelope detection applied for wireless sensor networks. Here, both the channel response and noise power are estimated simultaneously in comparison with other approaches in which the noise quantity is assumed to be known at the receiver. Hence, the developed estimators are more practical than those estimators without noise power estimation. Simulation results reveal that the system with both proposed schemes can achieve an excellent BER performance in a wide signal‐to‐noise ratio (SNR) range. More specifically, we observed that the simplified maximum likelihood estimator performed as well as the moment‐based first‐and‐second moments estimator for SNR greater than 7.5 dB, yet had much more decline at low SNRs. This study also investigated the effects of the numbers of receive antennas and transmit antennas on the system performance. Simulation results demonstrated that, at the BER of 10−3, the 5 × 5 system had an improvement of 7 dB in SNR compared with the 3 × 3 system. Copyright © 2011 John Wiley & Sons, Ltd.