This paper considers a communication system consisting of a vector quantizer (VQ) whose selected codevectors are mapped into points in the modulation signal space. The modulation signal is transmitted over Rayleigh flat fading channel. We optimize the modulation signal constellation to minimize the overall distortion of the system for the fixed VQ codebook. The optimization is obtained by partitioning the modulation signal space. Simulation results show that the signal constellation based on the proposed optimization scheme outperforms the conventional ones. (C) 1998 Elsevier Science B.V. All rights reserved.