An apparatus and method for channel estimation in a wireless communication system are provided. The apparatus includes a Channel Quality Indicator (CQI) memory unit for collecting a predetermined number of pieces of channel information for two or more mobile stations (MSs), a CQI DIFference (CQIDIF) memory unit for storing a predetermined number of differences between consecutive pieces of channel information with respect to each MS, a CQIDIF dispersion unit for calculating a predetermined number of dispersions between two pieces of consecutive channel information with respect to each MS, and a second comparator for comparing a dispersion for differences between the two consecutive pieces of channel information with a second threshold to identify a Rician channel.