The article reports on the characteristics of an algorithm that implements generalized minimum distance (GMD) decoding of Reed‐Solomon codes. The algorithm uses the novel Welch‐Berlekamp (WB) algorithm, as modified by Tze‐Hua, in order to minimize the complexity of the decoder. Both the WB algorithm and the GMD extension of the WB algorithm are described in outline. The performance of the GMD algorithm was simulated on AWGN channels and fading channels. Results are presented both for RS and concatenated RS codes. The gains over conventional decoding are larger for fading channels than for AWGN conditions but seem useful in all cases. The complexities of the GMD algorithm and the WB algorithm are analysed and compared to that of conventional RS decoding algorithms.