AbstractWe derive theminimum mean square error(MMSE) solution to vector precoding for frequency flat multiuser scenarios with a centralised multi‐antenna transmitter. The receivers employ a modulo operation, giving the transmitter the additional degree of freedom to choose aperturbation vector. Similar to existing vector precoding techniques, the optimum perturbation vector is found with a closest point search in a lattice. The proposed MMSE vector precoder does not, however, search for the perturbation vector resulting in the lowest unscaled transmit power, as proposed in all previous contributions on vector precoding, but finds an optimum compromise between noise enhancement and residual interference. We present simulation results showing that the proposed technique outperforms existing vector precoders, as well as the MMSETomlinson‐Harashima precoder, and compare the turbo‐coded performance to the capacity of the broadcast channel. Copyright © 2007 John Wiley & Sons, Ltd.