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A ΣΔ-driven RF switch-mode power amplifier is inherently linear only when it has a two-level output. At the same time, a two-level output generates the largest amount of quantization noise. This brief analyzes the effect of nonequal level spacing in a three-level ΣΔ output and provides a method for shaping the corresponding error noise to regions outside the band of interest. Subsequently, the nonlinearity-shaping property is utilized to obtain an improved two-level drive signal based on three-level ΣΔ modulation. The new binary drive signal is proven to have better adjacent channel leakage ratio and higher coding efficiency than a conventional two-level ΣΔ modulator. In the investigated case, measured coding efficiency improves from 8.9% of the conventional two-level modulator to 21% of the modified two-level modulator.