—Taking advantage of the frequency diversity and multiuser diversity in OFDMA based wireless networks, dynamic subcarrier assignment mechanisms have shown to be able to achieve much higher downlink capacity than static assignment. A rich literature exists that proposes MAC and physical layer schemes aiming at exploiting the diversity gain with low implementation complexity. In this paper, we propose a cross layer approach that explores the joint advantage of network coding and dynamic subcarrier assignment. Our algorithm improves the bandwidth efficiency of OFDMA downlink by encoding frames of the mobile stations that exchange information. We highlight a tradeoff between diversity gain and the network coding advantage, which is critical to the network performance. To explore the tradeoff, we formulate the coding aware dynamic assignment scheme as a mixed integer program, and design a polynomial time heuristic that can be used in practical systems. Based on a network flow formulatio...