In this article the new modified order-recursive least squares (MORLS) algorithm is presented for the multipath channel response estimation in the OFDM systems. The developed algorithm exhibits noticeably better performance (up to 1.4 dB) than traditional DFT-based methods due to improved noise filtering if the channel is characterised by a sparse power-delay profile. Computational complexity of the MORLS estimator is shown to be comparable with the DFTbased schemes for the channel impulse responses (CIRs) with maximum components present, whereas for the sparse CIRs or CIRs with shorter duration it reduces considerably and can potentially lower hardware power consumption.