—Information transmission over channels with transceiver distortion is investigated via generalized mutual information (GMI) under Gaussian input distribution and nearestneighbor decoding. A canonical transceiver structure in which the channel output is processed by a minimum mean-squared error estimator before decoding is established to maximize the GMI, and the well-known Bussgang’s decomposition is shown to be a heuristic that is consistent with the GMI under linear output processing.