This paper describes a three-step frequency-domain equalization scheme for multiple-input multiple-output (MIMO) underwater acoustic communication. First, an iterative least-squares channel estimation method is developed to enhance the accuracy of channel estimation in MIMO communication. The interference rejection combining method is then adopted to suppress co-channel interference based on the estimated MIMO channels. This technique exploits the correlation between the interference received through different channels. Finally, a decision feedback equalizer embedded with a digital phase-lock loop is cascaded before the final determination of equalized symbols to compensate the phase rotation. Experimental results show that the bit error rates of the proposed scheme can be several orders of magnitude lower than those of conventional frequency-domain equalization schemes.