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This paper investigates the use of a pilot signal in reducing the electrical peak-to-average power ratio (PAPR) of an orthogonal frequency division multiplexing (OFDM) intensity-modulated optical wireless communication system. The phase of the pilot signal is chosen based on the selected mapping (SLM) algorithm while the maximum likelihood criterion is used to estimate the pilot signal at the receiver. Bit error rate (BER) performance of the pilot-assisted optical OFDM system is identical to that of the basic optical OFDM (with no pilot and no PAPR reduction technique implemented) at the desired BER of less than 10-3 needed to establish a reliable communication link. The pilot-assisted PAPR reduction technique results in higher reduction in PAPR for high order constellations than the classical SLM. With respect to a basic OFDM system, with no pilot and no PAPR reduction technique implemented, a pilot-assisted M-QAM optical OFDM system is capable of reducing the electrical PAPR by over about 2.5 dB at a modest complementary cumulative distribution function (CCDF) point of 10-4 for M = 64. Greater reductions in PAPR are possible at lower values of CCDF with no degradation to the system's error performance. Clipping the time domain signal at both ends mildly (at 25 times the signal variance level) results in a PAPR reduction of about 6.3 dB at the same CCDF of 10-4 but with an error floor of about 3 ×10-5. Although it is possible to attain any desired level of electrical PAPR reduction with signal clipping, this will be at a cost of deterioration in the systems's bit error performance.