A new system and method is developed for reducing the crest factor of a signal. The system includes a large signal extraction module for receiving the input signal and the magnitude of the input signal to extract a large signal greater than a predetermined threshold .theta.; a large signal transformation module for converting the extracted large signal to a monotonically increasing concave function; a large signal filtering module for filtering the large signal transformed by the large signal transformation module to pass a predetermined band of the large signal; a delay means for shifting the phase of the input signal; and a combiner means for combining the signal output from the large signal filtering module with the input signal whose phase has been shifted by the delay means to reduce the crest factor of the input signal.