The received signal strength at a mobile wireless receiver as it moves over a small, local area is subjected to severe and rapid fluctuation. This rapid fluctuation in signal strength arises mainly due to multipath propagation in the immediate vicinity of the receiver. A proper characterization of this small-scale or fast fading is therefore necessary when investigating the performance of a receiver in the presence of noise and interference. The fading probability density function (pdf), which represents the probability density of the amplitude of the received signal, should be carefully chosen so that the system analysis gives accurate prediction of the bit-error rate (BER) or symbol-error rate (SER) performance. Rayleigh and Rician pdfs are commonly used to characterize small-scale fading, but experimental measurements of local fading signal amplitudes have sometimes shown that either one of these two pdfs is not adequate in this respect. The two-wave with diffuse power (TWDP) fading pdf, recently introduced with the aim to complement the above classical pdfs, characterizes the physical situation where there are two specular (dominant) waves in the presence of other diffuse components. The use of the TWDP pdf to characterize small-scale fading has the advantage that it has, as its special cases, the Rayleigh and Rician pdfs. Hence, BER and SER expressions derived for TWDP fading will encompass the corresponding expressions for Rayleigh and Rician fading. An initial study of the properties of the TWDP pdf suggests that it can produce a link poorer than that of Rayleigh fading. This is a significant claim, which needs to be investigated further, as Rayleigh fading is often used as the "worst-case" situation in the design of communication systems. This thesis details further investigations of TWDP fading, which include analyses of BER performance results of binary PSK, DPSK and FSK systems in TWDP fading. The