Cyclic delay diversity employing multiple transmit antenna provides increased frequency selectivity and thereby improves the frequency diversity in coded orthogonal frequency division multiplexing (OFDM). However, spatial correlation due to insufficient spacing between transmit antennas degrades the diversity performance. In this paper, the correlation of effective channel frequency response (CFR) of CDD OFDM is analysed and then propose constellation rotation and adjacent interleaving (CRAI) scheme over spatially correlated channel. In the proposed scheme, the subcarrier constellation is rotated by a known angle and then imaginary parts of rotated adjacent subcarriers are interleaved. The squared Euclidean distance of the codewords is derived to show the effect of constellation rotation. Adjacent interleaving is shown to exploit the frequency diversity by reducing the variation in average channel power (ACP) due to spatial correlation. Simulation results reveal that the proposed scheme performs well in spatial correlated channel and thereby improves the bit error rate (BER) performance. © 2012 Springer Science+Business Media, LLC.