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In this paper, we propose an adaptive power distribution algorithm which aims at improving the spectral efficiency in orthogonal frequency division multiplexing (OFDM) under the condition that the target bit error rate (BER) should be maintained and the transmit power threshold should not be exceeded. This algorithm is based on the iterative mechanism. In every iteration, the power and the corresponding number of bits are loaded to the subcarrier at which there is a modulation mode demanding the minimum average incremental transmit power per incremental bit to guarantee the pre-designated bit error rate (BER) performance. The iterative procedure terminates once the transmit power threshold is reached. The performance investigations show the proposed adaptive power distribution algorithm always outperforms the scheme of equal power distribution in a large dynamic range of transmit power threshold. Moreover, the performance improvement is very large when the transmit power threshold is required to be low.