In this letter, we propose a virtual channel (VC) optimization approach with a closed-loop and adaptive scheme for overloaded MIMO systems. With this approach, each input data stream goes through a VC which is generated at the transmitter; then it is transmitted to a receiver through the actual wireless channels. The VCs are concatenated with the actual wireless channels. Through VC optimization, the values of which can be adjusted to reduce the channel correlation, leading to a much improved system performance. Compared to the conventional overloaded MIMO systems, the overloaded MIMO systems with this approach can achieve significantly better performances in terms of the system capacity and symbol error rate (SER). The method that uses genetic algorithm (GA) for finding the optimal VC vector is described. Simulation results illustrate the effectiveness of the proposed approach.