This paper proposes an optimal block differential space-frequency scheme for multiple-input multiple-output orthogonal frequency-division multiplexing (MIMO-OFDM) systems. A rather general channel model is assumed, where the channel is frequency-selective and remains constant for only a single OFDM block. We achieve resilience against this fast fading environment by differentially encoding blocks of the transmitted signals in the frequency domain within each OFDM block so that differential decoding can be performed over blocks of subcarriers within each single OFDM block. This, coupled with an optimal subcarrier grouping allocation method, results in a computationally efficient differential modulation scheme that performs well for a wide variety of channel environments. The results demonstrate a 5 dB difference in performance between the scheme with the proposed optimal subcarrier grouping and a scheme without any subcarrier grouping.