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In this paper, a bandwidth efficient and energy efficient cooperative diversity scheme is proposed based on orthogonal signaling. Orthogonal signaling is achieved by transmitting in the in-phase and quadrature components of a phase shift keying modulation system. The bit error rate performance of the proposed cooperative diversity scheme increases with interuser signal strength. Numerical results show that the proposed cooperative diversity scheme can achieve the diversity order of two for high interuser signal-to-noise ratio.