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In this article, an enhanced wavelet domain communication system (EWDCS) is presented. The basic idea for this system is to synthesize an intelligent adaptive waveform in the wavelet domain at both the transmitter and receiver to avoid spectral crowded regions. This approach offers better bit error performance in contrast to other conventional interference mitigation techniques that process the signal at the receiver only. Moreover, since this smart waveform is able to search "spectrum hole" and adapt to electromagnetic environment, it could be a potential candidate in cognitive radio technology. The EWDCS exploits both transform domain processing and the evolutionary wavelet spectrum (EWS) estimation technique to extend interference avoidance capability from stationary interference to nonstationary interference. Compared to similar systems such as the transform domain communication system (TDCS) or the wavelet domain communication system (WDCS), the EWDCS significantly improves the bit error performance under nonstationary interference such as with swept-tone and also offers comparable bit error performance under stationary interference such as with single-tone, multiple-tone and partial-band interference. Our results indicate the proposed EWDCS is a viable approach to highly reliable communication or cognitive radio technology.