Single-carrier frequency division multiple access (SC-FDMA) has been adopted as a possible air interface for future wireless networks. It combines most of the advantages of orthogonal frequency division multiple access (OFDMA) and the low peak-toaverage-power ratio (PAPR) of single-carrier transmission. In this paper, a new transceiver scheme of Discrete Cosine Transform (DCT) SC-FDMA system is suggested. The suggested system called CE DCT SC-FDMA which refers to constant envelope discrete cosine transform SC-FDMA is based on phase modulation (PM). The output from PM component has the advantage of constant envelope (i.e. 0 dB PAPR) which allows the power amplifier (PA) to operate near the saturation region, thus maximizing the power efficiency and the coverage area. The proposed system is implemented with frequency domain equalization (FDE) to obtain high diversity gains over the frequency multipath channel. The effect of modulation index is evaluated via simulation thus the optimum value can be selected.