AbstractIn the TDMA subscriber loop radio communication system, large carrier frequency deviation exists in burst signals from subscribers to a base station. A modulation/demodulation technique, which is suitable for the burst transmission with large frequency variation, is studied in this paper. First, problems in the terrestrial TDMA system and clarified and it is shown that the use of conventional FSK‐discriminator detection causes large CNR degradation due to the variation. Next, differential FSK‐Partial Response Detection (DFSK), which can cope with the frequency variation and has a simple structure, is proposed and its principle and structure are described. Furthermore, the intersymbol interference and adjacent channel interference characteristics are evaluated theoretically and the bit error rate (BER) characteristics are evaluated experimentally. As a result, the optimum modulation index and IF‐band reception band path filter are obtained. Finally, the optimum transmission system of DFSK designed for wide‐band Digital Radio Subscriber Loop System using 26‐GHz band is described. DFSK is shown to be a practical and promising modulation/demodulation system for a terrestrial TDMA communication system, on which a large demand is expected in the future.