Orthogonal frequency division multiplexing (OFDM) is perhaps the most spectrally efficient method discovered so far for communication systems and yet have an excellent immunity against multipath fading and inter-symbol interference. One of the major drawbacks of OFDM systems is their high peak-to-average power ratio (PAPR), which degrades system performance when nonlinear high power amplifiers (HPA) are employed. In this article, a new companding technique based on gamma correction (GC) function is proposed and analyzed. Through extensive computer simulations, it is shown that the proposed technique outperforms the previously suggested A-law and μ-law companding methods for PAPR reduction. A thorough investigation of GCC companding is presented in terms of computational complexity (CC), complementary cumulative distribution function (CCDF), power spectral density (PSD), and bit-error-rate (BER). It is also shown that the proposed method is independent of modulation schemes and can be applied to any number of subcarriers.