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The design of power-efficient orthogonal frequency division multiplexing (OFDM) transmitters suffers from a major bottleneck due to the high peak-to-average ratio (PAR) of OFDM signals as the efficiency of a linear RF power amplifier (PA) reduces drastically due to backoff requirements. In this paper, we propose a system-level approach for dynamic power reduction in OFDM transmitters with varying channels. The proposed methodology uses adaptive baseband companding/expanding of the OFDM signal along with concurrent PA rebiasing to save power. Using channel quality information for dynamic PAR adaptation, the proposed approach achieves a PAR reduction of as high as 7.25 dB, under favorable channels. This translates to a power savings of 5.5× compared with static PAs and 3.6× compared with adaptive PAs with only output-power adaptation.