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The statistical performance of radio communication circuits in the presence of interference is analyzed for the cases where either the desired or undesired signal or both are subject to Rayleigh fading over the propagation path. The significant parameter considered is the ratio of mean signal power to mean interference power needed at the receiver for satisfactory performance. When satisfactory performance is required a high percentage of the time the signal power must be greatly increased over the nonfading case, e.g., 99.9 per cent satisfactory operation requires 30 db more signal power in the presence of signal fading whether or not the interference is fading. The improvement which dual diversity reception offers is discussed for each case. For 99.9 per cent satisfactory operation a practical dual diversity system offers a 14 db improvement over nondiversity for fading signal and fading interference.