Abstract-The objective of this work is to research and analyse the performance of Cyclic Delay Diversity (CDD) with two transmit antenna on DVB-H systems operating in spatially correlated channel. It is shown in this paper that CDD can achieve desirable transmit diversity gain over uncorrelated channel with or without receiver diversity. However, in reality, the respective signal paths between spatially separated antennas and the mobile receiver is likely to be correlated because of insufficient antenna separation at the transmitter and the lack of scattering effect of the channel. Under this spatially correlated channel, it is apparent that CDD cannot achieve the same diversity gain as obtained under the uncorrelated channel. In this paper, a new upper bound on the pairwise error probability (PEP) of the CDD with spatial correlation of two transmit antennas is derived. The upper bound is used to study the CDD theoretical error performance and diversity gain losses over a generalized spatially correlated Rayleigh channel. This theoretical analysis is validated by the simulation of DVB-H systems with two transmit antennas and the CDD scheme. Both the theoretical and simulated results give the valuable insight that the CDD ability to perform well with a certain amount of channel correlation.Index Terms-Cyclic delay diversity (CDD), DVB-H, pairwise error probability (PEP), spatial correlation, transmit diversity.