Aspects of a method and system for enhancing efficiency by modulating power amplifier (PA) gain are presented. Aspects of the system may comprise a PA gain modulator that enables modification of an amplitude of a digital baseband signal. A baseband processor may enable computation of a first gain value based on the modification. The baseband processor may enable computation of a second gain value based on the first gain value. A PA may enable generation of an RF output signal based on the modified digital baseband signal and the second gain value.