A pilot symbol-aided Rayleigh fading compensation is investigated for M-ary quadrature amplitude modulation (QAM) in land mobile communication to achieve high spectrally efficient land mobile communication systems. The optimum parameters for fading compensation, bit error rate (BER) performance against E(b)/N0 (energy per bit to the noise power spectrum density), adjacent channel interference, and cochannel interference for 16QAM, 64QAM, and 256QAM, and the spectral efficiencies for these modulation schemes in Rayleigh fading environments are investigated by computer simulation. To further verify the effect of pilot symbol-aided fading compensation from a practical point of view, a 16QAM moden is implemented, laboratory experiments are executed, and the impact of the dynamic range limitation due to the resolution of the analog to digital (A/D) converters, and imperfection of the analog circuits are evaluated. It is demonstrated by computer simulation and laboratory experiments that the pilot symbol-aided fading compensation can sufficiently compensate for fast varying Rayleigh fading, and 16QAM gives the highest spectral efficiency in the case of cellular systems.