A low overhead and high accurate channel estimation algorithm was proposed and experimently verified in Intensity Modulation Direct Detection Orthogonal Frequency Division Multiplexing (IMDD-OFDM) optical transmission system. By fully considering system noise feature, this algorithm utilized the comb-type pilot insertion scheme, and combined the teachniques of symbol averaging and linear interpolation method within subcarriers, which could achieve a high estimation accuracy and a low overhead. The results are shown in simulaiton and theoretical derivation that, compared with the common channel estimations, the algorithm we proposed can achieve a better performance which is more close to the characteristic of real system channel. The experiment results demonstrate that, at a Bit Error Ratio (BER) of 3.8×10－3, this algorthim only with 0.78% pilot overhead can achieve the same performance to compare with that of the 20.31 % pilot overhead of normal frequency domain avageral algorithm. In additon, compared with other normal algorthims, our algorithm is irrelevant to the pilot overhead, can effectively reduce the mean squared error of channel estimation and achieve a high tolerance for the Gaussion noise of system, thus achieving relatively close performance to the real channel feature.