An improved carrier phase estimation (CPE) algorithm based on linear phase interpolation (LPI) is proposed, and simulation and experiment are conducted for evaluating the performance of the proposed algorithm in a 112 Gb/s dual-polarization 16-ary quadrature amplitude modulation (DP-16QAM) system. A LPI function is used to deal with the obtained estimated phase noise in the algorithm based on CPE of block averaging for significantly improving the accuracy of CPE. Compared with the normal block averaging method, the variance of estimated phase error of the proposed algorithm is reduced by 26%, and the linewidth tolerance is 2 times compared with the algorithm based on block averaging. For a 112 Gb/s DP-16QAM experimental system, at 3.8×10-3 bit error rate (BER), a 0.7 dB reducement in terms of the required optical signal-to-noise ratio (OSNR) is demonstrated using the proposed algorithm based on CPE algorithm with respect to the normal block averaging algorithm. The performance of the proposed algorithm is comparable to the algorithm based on sliding window. However, hardware complexity is reduced by 99.2% in comparison with the algorithm based on sliding window.