A novel communication system based on orthogonal frequency and code division multiplexing was proposed for precise time measurement in the fading channel, and a novel iterative algorithm was proposed to improve the performance caused by the fading channel and phase noise without reducing the maximum unambiguous time. In the scheme, the coefficients of fading channel and the phase noise were jointly estimated with the time delay. It is shown both by theory and computer simulations that the proposed scheme can effectively mitigate the time estimation error caused by fading channel and phase noise.