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In this paper, a computationally efficient adaptive channel estimation scheme is proposed for a space-time block coded (STBC) multiple-input multiple-output orthogonal frequency division multiplexing (MIMO-OFDM) system. This adaptive channel estimation scheme is based on recursive least square (RLS) algorithm. The proposed channel estimation scheme is less complex and bandwidth efficient than the conventional channel estimation schemes for MIMO-OFDM systems. Simulation results show that the proposed channel estimator performs quite close to the system where ideal channel state information is available. At the receiver, signals from different co-channel users are detected using minimum mean squared error (MMSK) interference cancellation (IC) method. It is shown that the signal detection with the proposed channel estimator could be used to increase the system capacity. Simulation results are compared with theoretical error bounds.