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A new wavelet coded PSK system with a good compromise between computational complexity and error performance over time-varying flat fading channels is proposed and evaluated by computer simulation. This system exploits the association of wavelet encoding with a diversity scheme as a means to increase the performance benefits of the wavelet coding technique at a lower price of complexity. Besides, it maps the encoded symbols into a new PSK constellation specially suited for this application. Several results of performance evaluation obtained under different conditions of fading and SNR are presented, and the effect of imperfect channel estimation using the LMS algorithm in the receiver is also considered. These results show that the proposed system is an effective means for performance improvement over the considered channels.