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This paper proposes a spectral efficient cooperative diversity technique with multi-layered modulation for high data rate transmissions. The proposed system transmits with different cyclic delay and phase rotation patterns, in order to achieve cooperative diversity gain for all transmit signals from the source. Since these patterns increase the interference between the layers, we derive optimal cyclic delay and phase rotation patterns to minimize mean square error. With the optimal patterns, the proposed system still suffers from inter-layer interference, especially in high-order modulations. To overcome this problem, multiple layers are separately interleaved by layer-specific interleavers and are mapped by hierarchical symbol mapping for the high data rate transmission with cooperative diversity. A destination structure with iterative equalization is also presented to separate each layer and extract diversity gain for high data rate transmissions. The proposed system can use reliable feedback from the layers and effectively remove the inter-layer interference. To estimate the performance of the proposed system, we develop a density evolution technique. It is shown that the predicted performances agree with simulated performances. Simulation results indicate that the proposed system achieves cooperative diversity and has better performance than conventional cooperative systems.