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For EDGE systems with transmit diversity in frequency-selective channels, the orthogonality of space time block coding (STBC) is ruined by the delay spreads of multipath channels and the interference is enhanced by the multi-antenna transmission respectively. The enhanced cochannel and co-antenna interference cannot be suppressed by the conventional equalization. In this paper a maximum likelihood sequence estimation (MLSE) receiver with a bi-directional extended window and multistage processing is proposed to restore the diversity gain. The window is initiated from the known midamble and alternately extended to backward and forward data slots by a step equal to the STBC block size. Only new symbols included in the window are estimated by the MLSE and then the bi-directional window is further extended until all the data burst is estimated. The numerical results show that the proposed scheme can efficiently suppress the co-antenna interference and restore the transmit diversity.