A new interference cancellation system was devised to suppress the mutual interference between satellite and terrestrial communication systems and to expand the number of potential earth station locations for effective frequency reuse. This system basically adopts the sidelobe canceller concept and has main and auxiliary antennas. The originality of this system lies in that the auxiliary channel signal to be combined with the main channel signal is modulated by a low frequency signal, and the amplitude and phase controlling voltages are obtained by means of envelope detection, to get the envelope of the residue, and then by phase detection, using the envelope signal and the low frequency signal. As a result of experiments, more than 40 dB cancellation was achieved over a 50 MHz range for CW, FM(TP, TV) and PSK signals, even if the desired and interference signals are in the cochannel. In the field test on a 45 km path, sufficient cancellation performance and response were obtained even during fading periods.