We propose using a soft decision-directed least-mean-square algorithm in a code-aided equalization scheme for fading channels. Soft-output Viterbi algorithm (SOVA) is modified and applied to strengthen the second-stage equalizer adaptation in the scheme. Simulation results are presented for bit error rate performance in a multipath environment for various normalized fade rates. The proposed equalizer scheme is shown to provide significant bit error rate improvement compared to conventional equalization schemes.