—We discuss a novel pilot design for multi-user channel estimation in the OFDM uplink with localized block-type pilot placement. Due to this placement, multiple users’ channels interfere with each other. By analyzing the properties of this multi-user interference, a criterium of choosing an appropriate DFT phase shift in frequency domain is derived. With this optimized shift, the multi-user interference can be mitigated to improve the channel estimation performance significantly. Both analytical and simulative results confirm that the Mean Square Error (MSE) performance of the proposed channel estimation scheme is close to the upper bound of the single-user case.