An improved spread spectrum communication system includes a transmitter and a receiver utilizing a pilot channel for the transmission of pure rather than modulated PN codes for code acquisition or tracking purposes with a lower bit error rate. The pilot signal is used to obtain initial system synchronization and phase tracking of the transmitted spread spectrum signal. At the transmitter side, a Walsh code generator, a Walsh modulator, a first PN code generator, a first band spreader, a second band spreader, finite impulse response filters, digital-analog converters, low-pass filters, an intermediate frequency mixer, a carrier mixer, a band-pass filter are used to transmit a spread spectrum signal. At the receiver side, a corresponding band-pass filter, a carrier mixer, an intermediate-frequency mixer, low-pass filters, analog-digital converters, a second PN code generator, an I channel despreader, a Q channel despreader, a PN code synchronization controller, a Walsh code generator, a first Walsh demodulator, a second Walsh demodulator, accumulator & dump circuits, a combiner, and a data decider are used to demodulate a received spread spectrum signal