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Orthogonal frequency division multiplexing (OFDM) is of great interest for researchers and research laboratories all over the world. OFDM is widely used in contemporary communication systems for its good robustness in multipath environment, and its high spectral efficiency. The capacity of wireless system can be increased dramatically by employing multiple input multiple output, (MIMO) antennas. The combination of MIMO and OFDM system is found to be very beneficial. A major drawback of OFDM-MIMO system is its high peak to average power ratio (PAPR) Reduction. The peak power of a signal is a critical design factor for band limited communication systems, and it is necessary to reduce it as much as possible. Here a modified Interleaving PAPR reduction technique is proposed. The proposed technique for PAPR reduction gives an improvement over the existing technique at a cost of negligible decrease in the data rate.