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Power allocation, relay selection and subchannel pairing are three important issues in OFDM based relay wireless systems to improve the system performance and reliability. In this paper, we will propose a joint power allocation, relay selection and subchannel pairing algorithm. The goal of the algorithm is to maximize the system capacity under the constraint of overall power at both source and relay nodes. We prove that the algorithm is the optimal solution to the problem, however, its' complexity is too high to be employed in the practical applications. Therefore, we also proposed a sub-optimal algorithm with low computational complexity. Through numerical simulations, the performances of both optimal and suboptimal algorithms are evaluated.