Carrier frequency offset (CFO) is a factor that corrupts subchannel orthogonality resulting to performance degradation in multiple-input multiple-output orthogonal frequency division multiplexing systems. We investigate the effect of CFO on the channel estimation and the effect of both CFO and channel estimation on the system capacity. The main result of the paper is a lower bound on the capacity for a given CFO and channel estimation error covariance. The lower bound is based on the Gaussian bound of the multiplicative noise because of channel estimation errors. Copyright (C) 2012 John Wiley & Sons, Ltd.