Aiming to solve the issue of increased peak-to-average power ratio (PAPR) caused by flipping operation in a flip orthogonal frequency division multiplexing system, a dynamic clipping compensation combined with a μ-law expansion technique is proposed to suppress the PAPR of the system. First, based on the flipping characteristics, the positive and negative signals that meet the clipping criteria are clipped, and the clipped values are compensated at the zero signal positions of the corresponding index's negative and positive signals. Then, the cropped signal is subjected to a μ-law compression-expansion transformation to increase the average power of the signal. Finally, at the receiving end, the clipped and compensated signals are compared using maximum likelihood. The preclipped signal is restored based on the compensated signal, and the compensated signal is then set to zero to reduce signal distortion. The simulation results show that under the conditions of pulse amplitude modulation, complementary cumulative distribution function of 10^-3, and no loss in bit error rate, compared with the flipping system and the μ-law algorithm, the proposed algorithm reduces PAPR by 6.01 dB and 2.81 dB, respectively.