Active constellation extension (ACE) is a method that can effectively reduce the peak-to-average power ratio (PAPR) of the orthogonal frequency division multiplexing (OFDM) system. ACE algorithms used in OFDM systems mostly set a fixed amplitude limiting threshold in the iteration process. Since the statistical characteristics of OFDM signals will change after each iteration, the same threshold will limit the ability of the system to suppress PAPR. In response to this problem, an optimal threshold ACE (OTACE) method is proposed, which can find an appropriate threshold according to the signal power at each iteration, improving the system's ability to reduce PAPR. Furthermore, a suitable number of experimental iterations through simulation is obtained, on this basis, simulated experiments are performed on the performance of suppressing PAPR and system bit error rate. The experimental results show that the proposed OTACE algorithm does not lose the system's bit error rate performance, and compared with the existing ACE method, the OTACE algorithm can reduce the PAPR of the OFDM system more effectively.