A transceiver capable of IQ mismatch compensation on the fly and a method thereof. The transceiver comprises a transmitter circuit and a loop-back circuit. The transmitter circuit is configured to up-convert a modulation signal on the fly to generate a first RF signal. The loop-back circuit is configured to down-convert the first RF signal and then digitize the down-converted first RF signal to determine a first IQ mismatch parameter based on a first statistical measure of the digitized down-converted RF signal. The transmitter circuit is further configured to compensate for first IQ mismatch in the transmitter circuit according to the first IQ mismatch parameter to generate an IQ compensated modulation signal.