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The principal design problem encountered in wireless communications is how to overcome the distortion of received signals by time-varying propagation path due to the phenomenon called fading. Also, a well known problem of orthogonal frequency division multiplexing (OFDM) i.e the occurrence of high peak- to-average power ratio (PAPR) in the time domain signal reduces the efficiency of transmit high power amplifier.In this paper, we propose a closed loop orthogonal frequency division multiplexing multiple-input multiple-output (MIMO) transmit preprocessing system, where the channel coding method referred as pilot symbol assisted rateless coding (PSAR) is used to mitigate the effects of fading and three PAPR reduction methods are used and the best method to reduce PAPR is chosen. The performance of proposed system is measured in terms of bit error rate (BER) and complementary cumulative distribution function (CCDF) for PAPR. The proposed system achieves about 3 dB improvement in PAPR over the traditional OFDM.