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Hierarchical quadrature amplitude modulation (HQAM) enables unequal priority transmission through the use of non-uniformly spaced constellations. In this paper, we propose an adaptive HQAM (A-HQAM) scheme where the ratios between the constellation distances are regularly adjusted based on the channel condition with the objective of maximizing the transmission efficiency. The source bit stream is divided into multiple sub-streams which are simultaneously transmitted, each on a different priority level. When using A-HQAM, the high priority sub-stream maintains an acceptable bit error rate performance over all channel conditions. As the channel condition improves, the required protection for the high priority sub-stream is reduced allowing for increasing the protection level of lower priority sub-streams. Hence, the number of sub-streams with acceptable BER performances is incrementally increased as the channel condition improves. Analysis and simulation results show that the proposed A-HQAM not only enhances the transmission efficiency but also provides reduced peak to average power ratio (PAPR). The proposed scheme offers reduced complexity by using one constellation size, unlike conventional adaptive schemes which require the use of several constellation sizes. Moreover, a practical A-HQAM implementation is presented which enables the receiver to successfully demodulate the received signal without knowing the varying transmission parameters.