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We propose an efficient time-domain adaptive decision-directed channel equalizer (TD-ADDCE) for reduced-guard-interval dual-polarization coherent optical orthogonal frequency-division-multiplexing (RGI-DP-CO-OFDM) transmission systems. TD-ADDCE estimates the phase noise in a decision-directed scheme by extracting and averaging the phase drift of OFDM subcarriers. It updates the channel state information (CSI) using the decision data and previous estimated CSI in time domain on a symbol-by-symbol basis. In addition, TD-ADDCE can perform efficiently without any matrix inversion. We numerically compare the performance of TD-ADDCE with frequency domain ADDCE (FD-ADDCE) for a 112-Gb/s RGI-DP-CO-OFDM system at laser linewidth of 100 kHz. The simulation results show that TD-ADDCE attains a superior performance than FD-ADDCE. At a forward error correction threshold of 38×10-3, TD-ADDCE can increase the maximum transmission reach by ~ 29% as compared with FD-ADDCE. We also show that only small additional computational efforts are required for TD-ADDCE as compared with FD-ADDCE.