We consider the design of pilot sequences for channel estimation in the presence of carrier frequency offset (CFO) in systems that employ orthogonal frequency division multiplexing (OFDM). The CFO introduces intercarrier interference (ICI) which degrades the accuracy of the channel estimation. To minimize this effect, we solve for the pilot sequence that minimizes the mean square error of the modified least squares (mLS) channel estimator. The transmission of this sequence results in high peak-to-average power ratio (PAPR) of the OFDM signal. To solve this problem, we first introduce a new estimator as an alternative to the mLS estimator. We then design a low PAPR pilot sequence tailored to this new estimator. We show that the proposed procedure completely eliminates the effect of the ICI on the channel estimate. Both analytical and computer simulation results demonstrate the superiority of the proposed scheme over the mLS estimator. © 2010 IEEE.