Abstract-High peak to average power ratio (PAPR) of a transmitted signal is one of the major drawbacks of the complex wavelet packet modulation (CWPM) as usual in any multicarrier communication system. Utilizing the advantage of concentrating the energy to certain subspaces of the discrete wavelet transform, many PAPR reduction techniques are proposed to solve this problem like threshold and clipping methods. In this paper a novel hybrid PAPR reduction method for CWPM called Threshold-Clipping (TC) method has been proposed. The simulation results in Rayleigh multipath fading channel show that the proposed scheme has achieved 4.5 dB and 3 dB reduction in PAPR over the traditional threshold and clipping methods respectively with less than 0.5 dB degradation in bit error probability.