A novel phase noise (PN) compensation algorithm based on the decision feedback (DF) algorithm and the linear combination self cancellation (LCSC) algorithm is proposed to improve the system performance degradation caused by laser linewidth in coherent optical orthogonal frequency division multiplexing (CO-OFDM) systems. In this proposed LCSC-DF algorithm, the LCSC algorithm is used to precode the subcarrier information at the transmitter and decode the demodulation information and inter-carrier interference (ICI) related information at the receiver. And then the pilot information is used to obtain the final compensation signal by the improved DF algorithm. The simulation results show that the PN compensation performance of the proposed LCSC-DF algorithm is better than that of the DF algorithm. Furthermore, with the increase of the signal to noise ratio (SNR), its bit error rate (BER) performance approaches to that of the SC-DF algorithm at the larger PN linewidth. The subcarriers utilization ratio of the proposed algorithm is higher than that of the SC-DF algorithm. As a result, the proposed algorithm can effectively improve the performance of the system.