An adaptive interference canceller for canceling an interfering signal corresponding to a delayed, frequency translated, amplitude and phase offset version of a transmitted signal contained in a composite received signal relayed through a relay system such as a satellite transponder. The canceller digitally downconverts the received signal and a local replica of the transmitted signal from IF to baseband, applies a variable delay and frequency compensation to the replica as a coarse delay and frequency correction, and tracks fine delay, amplitude and phase differences using an adaptive finite impulse response filter to generate a cancellation signal corresponding to the delayed and frequency shifted version. A minimum output power process produces an error signal that drives the variable delay and adaptive filter to minimize the power in the signal of interest to maximize cancellation of the interfering signal.