Abstract: In this paper we consider a two-way relaying system, where two source terminals A and B desire to exchange information through a relay node R . To decode the superimposed signal from A and B efficiently, we proposes a practical scheme of joint physical network coding (PNC) and channel coding for multiple-access channel based on QAM modulation in the multiple access (MAC) stage of the investigated two-way relay scenario. The proposed scheme employs a denoising-mapping plan ingeniously, where the relay node first denoises the received mixture from A and B , and then maps it to the binary XOR of the corresponding digital bits after rearranging the constellation of QAM modulation. In addition, the scheme takes advantage of the linearity of convolutional code and MAC-XOR NC code so that digital bits of network coding can be estimated directly. In this way the complexity of the demodulation/decoding at the relay node is reduced by almost 50%. Also the BER (Bit Error Rate) performance of the proposed scheme is analyzed in this paper. Simulation experiments are done and performance comparisons are conducted. Our results show that the proposed scheme outperforms the current PNC strategies significantly in terms of the channel capacity without added the complexity of decoding.