Orthogonal frequency division multiplexing with index modulation (OFDM-IM) is a multi-carrier transmission scheme in which a set of sub-carriers is chosen and modulated according to the incoming bit-stream. It is already established that for the same average bits per channel use, OFDM-IM can provide a better error rate performance when compared to conventional OFDM. In this letter, we propose a novel method to further improve the error rate performance of OFDM-IM with the aid of lower order signal constellations, by using fewer bits for symbol selection and using the remaining bits to select the index combinations. As the increased number of indexing bits demand more index combinations for mapping them, certain index combinations are reused, with the reuse made unambiguous by rotating lower order constellation. This approach provides significant signal-To-noise ratio gains without compromising spectral efficiency when compared to existing OFDM-IM schemes. © 1997-2012 IEEE.