In this paper, we analyze power and rate adaptation in a point-to-point link with Rayleigh fading and impulsive interference. We model the impulsive interference as a Bernoulli-Gaussian random process. Adaptation is used to maximize the average spectral efficiency by changing power and rate of the transmission subject to an average power and instantaneous probability of error constraints. Without impulsive interference, it is well known that water-filling is optimal for block fading. We provide two simple schemes that show that the conventional water-filling algorithm is not optimal in an impulsive interference channel. © 2020 IEEE.