N-continuous has been proved to be an effective and simple way in reducing the out-of-band power radiation of orthogonal frequency division multiplexing (OFDM) signals. However, it achieves sidelobes reduction at the cost of additional distortion to data signals and requires iterative processing to reverse the transmitter processing. In this paper, a novel iterative receiver is proposed to estimate and cancel the distortion caused by N-continuous processing. The proposed method is applied to multi-input multi-output (MEMO) OFDM signals whose sidelobes are reduced by N-continuous processing. It is shown by simulation that the bit error rate (BER) performance of MEMO OFDM system will be greatly improved with moderate complexity increase.