Traditional pulse-amplitude-modulated discrete multitone modulation (PAM-DMT) suffers from poor overall performance of spectral and power efficiencies in optical wireless communication (OWC) systems. We propose layered hybrid PAM-DMT (LHPAM-DMT) to utilize more subcarriers to improve the performance. The real part of frequency domain signal is divided into several layers and symmetry biases are added in time domain to generate real-valued and nonnegative signals for intensity modulation with direct detection (IM/DD) OWC systems. By appropriately designing the orthogonality between the signals in lower layers and signals & added biases in higher layers, we further propose an iterative receiver to recover the transmitted information. Theoretical derivation proves that LHPAM-DMT has higher spectral efficiency than PAM-DMT and lower complexity than layered PAM-DMT. Numerical results suggest that LHPAM-DMT is more power efficient than PAM-DMT as well as direct-current (DC) biased optical OFDM (DCO-OFDM), one of the most popular schemes.