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Phase noise causes significant degradation in the performance of orthogonal frequency division multiplexing (OFDM)-based wireless communication systems. The presence of phase noise can reduce the effective signal-to-noise ratio (SNR) at the receiver, and consequently, limit the bit error rate (BER) and data rate. In this paper, the effect of phase noise on OFDM wireless systems is studied, and a compensation scheme is proposed to mitigate the common phase error and intercarrier interference (ICI) caused by phase noise. In the proposed scheme, the communication between the transmitter and receiver blocks consists of two stages. In the first stage, block-type pilot symbols are transmitted and the channel coefficients are jointly estimated with the phase noise in the time domain. In the second stage, comb-type OFDM symbols are transmitted such that the receiver can jointly estimate the data symbols and the phase noise. It is shown both by theory and computer simulations that the proposed scheme can effectively mitigate the ICI caused by phase noise and improve the BER of OFDM systems. Another benefit of the proposed scheme is that the sensitivity of OFDM receivers to phase noise can be significantly lowered, which helps simplify the oscillator and circuitry design in terms of implementation cost and power consumption.