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Approximate maximum-likelihood noncoherent sequence detection (NSD) for differential space-time modulation (DSTM) in time-selective fading channels is proposed. The starting point is the optimum multiple-symbol differential detection for DSTM that is characterized by exponential complexity. By truncating the memory of the incremental metric, a finite-state trellis is obtained so that a Viterbi algorithm can be implemented to perform sequence detection. Compared to existing linear predictive receivers, a distinguished feature of NSD is that it can accommodate nondiagonal constellations in continuous fading. Error analysis demonstrates that significant improvement in performance is achievable over linear prediction receivers. By incorporating the reduced-state sequence detection techniques, performance and complexity tradeoffs can be controlled by the branch memory and trellis size. Numerical results show that most of the performance gain can be achieved by using an L-state trellis, where L is the size of the DSTM constellation.