A method and apparatus for reducing a Peak to Average Power Ratio (PAPR) using peak windowing is provided. In the apparatus, an absolute value calculator calculates an absolute value of an input signal, a subtractor subtracts a predetermined clipping threshold level from the absolute value, a smoothing unit performs smoothing on the subtracted signal according to a predetermined smoothing scheme and outputs a first smoothed signal, an adder adds the first smoothed signal to the clipping threshold level, an inverse calculator outputs a second smoothed signal by multiplying the clipping threshold level by an inverse of the added signal, and a multiplier outputs a final PAPR-reduced signal by multiplying the input signal by the second smoothed signal. The method and apparatus address an overcompensation problem while processing signals having a large bandwidth and a high data rate without delay, thereby minimizing the clipping influences on Bit Error Rate (BER) and Adjacent Channel Leakage Ratio (ACLR) performances.