The high Peak-to-average Power Ratio (PAPR) problem in the Coherent Optical Orthogonal Frequency-division Multiplexing (CO-OFDM) systems can lead to serious optical fiber nonlinear effects. In order to solve this problem, an improved Active Constellation Extension (ACE) algorithm was proposed, which could obtain better PAPR suppression effect. The traditional ACE algorithm was achieved combined with the projection onto convex sets method (POCS). In the proposed algorithm, Parabolic Peak Cancellation (PPC) algorithm was used to improve the peak regeneration phenomenon in the process of iteration, and the speed of convergence was improved by constellation point pre-adjustment technology. We applied the improved algorithm to a 4-QAM, and 29 Gb/s CO-OFDM system. The simulation results show that the proposed algorithm can effectively reduce the PAPR of OFDM signals by 4.41 dB and have faster convergence speed.