The conventional hybrid STBC schemes can achieve less BER performance for STBC detection schemes than conventional STBC schemes since SM symbols interfere with STBC symbols. Therefore, this letter proposes the improved scheme for hybrid STBC systems. STBC and SM schemes are combined for the hybrid space-time block code system. Our approach effectively obtains both diversity gain and spectral efficiency gain. The proposed scheme offers improved BER performance since it uses iterative detection. Moreover, it increases the data rate effectively with a little performance loss.