Current digital radio systems have spectral efficiencies of only half that attained by FDM-FM analog systems. This paper describes a system, that exploits the inherent ruggedness of digital modulation and the concept of frequency reuse to achieve spectral efficiencies of 4.5 bits/s/Hz which is comparable to that achieved by analog systems. The major technical challenge in implementing such a system was devising a means to maintain adequate cross-polarization discrimination during multipath fading. Details are given on extensive digital and analog field experiments that were conducted to verify that cofrequency cross-polarized operation during multipath fading was feasible. The key to achieving satisfactory performance is shown to be the use of space diversity with in-phase combining.