The implementation of OFDM-based systems suffers from impairments such as in-phase and quadrature-phase (IQ) imbalances in the front-end analog processing. Such imbalances are caused by the analog processing of the radio frequency (RF) signal and can be present at both the transmitter and receiver. The resulting IQ distortion limits the achievable operating SNR at the receiver and the achievable data rates. In this paper, the effect of both the transmitter and receiver IQ imbalances in an OFDM system is studied and algorithms are developed to compensate for such distortions.