Transmission performance of carrier superposed signals for frequency reuse are significantly degraded when transmitted through a satellite channel containing a nonlinear device. The extent to which the signals are degraded depends on the operating level (back off) of the transponder. This paper proposes a method to compensate for the effects of nonlinearity in the interference canceller by giving the same nonlinearity to a replica with the capability to automatically track the back off of the satellite transponder. Computer simulations show that the proposed technique significantly enhances system performance at all transponder operating levels even though it can be simply implemented in the canceller by digital signal processing circuits.