—The trellis shaping (TS) is an effective technique not only for average power reduction of high-order QAM signals, but also for peak power reduction of band-limited single-carrier PSK signals. Our recent work has demonstrated that signals with almost constant envelope can be generated. Compared to the unshaped PSK system, however, this shaping process introduces signal constellation expansion exclusively for peak power reduction and thus reduces the minimum Euclidean distance of the PSK signal constellation, rendering the overall system sensitive to channel noise. To overcome this drawback, this paper proposes a new decoding algorithm of the TS that exploits the Markov process property of the shaped symbols. This decoding algorithm can work alone, but becomes more effective when the shaping encoder is serially concatenated with a channel coding. The simulation results demonstrate that this serial concatenation together with an iterative decoding between shaping and coding can achiev...