Peak-to-average power ratio (PAPR) is an important issue for orthogonal frequency division multiplexing (OFDM) systems. In this letter, we derive a new piecewise nonlinear companding scheme for reducing PAPR in OFDM systems. Compared with current state-of-art companding scheme, the new companding scheme improves the power spectral density (PSD) performance. The companding function is derived according to the cumulative distribution function (CDF) of companded OFDM signals’ amplitudes, which is fitted by using several piecewise linear functions to approximate the original Rayleigh distribution CDF. The constraint optimization problem is formulated, and parameter selection method is provided. Simulation results verify that under precondition of similar PAPR reduction levels, the proposed companding scheme could achieve better bit error rate (BER) and PSD performance compared with other typical companding schemes.