An apparatus and method for reducing pilot overhead in a broadband wireless communication system are provided. A data symbol mapper maps data symbols to be transmitted into subcarriers and detects values of the data symbols mapped into predefined subcarriers. A pilot generator determines masking codes for each pilot group by using the detected values of the data symbols and masks the determined masking codes into pilot symbols of the corresponding pilot group. A pilot symbol mapper maps the masked pilot symbols received from the pilot generator into subcarriers.