A method, performed by a user equipment (UE), of transmitting an uplink (UL) reference signal in a wireless communication system is provided. The method includes receiving first information indicating whether to apply transform precoding and pi/2 binary phase shift keying (BPSK) modulation to a physical uplink shared channel (PUSCH), receiving second information indicating whether to apply the pi/2 BPSK modulation to an UL demodulation reference signal (DMRS), and identifying a sequence having characteristics of a first peak-to-average power ratio (PAPR) based on the first information and the second information.