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We report on our design and measurements that have been made for a direct-sequence spread-spectrum radio using differential phase-shift keying modulation for a wireless PBX. We describe the design and implementation of a transmitter and a receiver using a surface acoustic wave (SAW) filter matching the spread-spectrum code of a user. The receiver performance is within 1 dB of the theoretical performance of a differential phase-shift keying (DPSK) receiver in the presence of additive white Gaussian noise. We also show receiver performance in a multipath fading indoor environment with multipath fade notches of up to 50 dB depth. The indoor channel multipath fading can be overcome by using an equal gain diversity combiner which is suitable when DPSK modulation is used. We confirm that the indoor mean power level attenuation follows the inverse fourth power of the distance. Also, we investigate the multiple-access capability of the system by introducing an interfering transmitter with a different spread-spectrum code sequence.