A method of ranging and sub-carrier selection in an orthogonal frequency division multiple access (OFDMA) system and the OFDMA system is disclosed. An OFDM symbol is received from a customer premises equipment (CPE) at a base station. The OFDM symbol is demodulated for obtaining a plurality of subcarriers. A plurality of data subcarriers are multiplied by zeros and stored. A plurality of uniformly spaced subcarriers is extracted from the stored subcarriers. A ranging CPE is detected in uniformly spaced subcarriers. Delay estimation is performed using the stored plurality of subcarriers upon detecting presence of ranging CPE. A method of subcarrier allocation at a ranging CPE transmitter based on total number of subcarriers, subcarriers in used band, a delay spread to be supported in terms of number of samples, a required ratio of highest amplitude to second highest amplitude of the ranging signal is disclosed.