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We propose a block coded modulation (BCM) technique to reduce the peak to average power ratio (PAPR) in OFDM systems. In the proposed technique, binary blocks are mapped to M-ary blocks and M-ary blocks of small sizes with low PAPR are selected. Large size M-ary blocks with low PAPR are constructed by using the selected small size M-ary blocks. Similar to trellis coded modulation, with this technique variable rates ranging from 1 to a rate much higher than 1 of BCM can tie obtained upon different requirements of the random error correction capability in the system, given that the PAPR is below a fixed value. The PAPR gain is defined by comparing with the uncoded OFDM system. Optimal coding gain for the BCM given a PAPR gain is also obtained in various cases.