We propose an adaptive SLM scheme based on peak observation for PAPR reduction of OFDM signals. The proposed scheme is composed of three steps: peak scaling, sequence selection, and SLM procedures. In the first step, the peak signal samples in the IFFT outputs of the original input sequence are scaled down. In the second step, the sub-carrier positions where the power difference between the original input sequence and the FFT output of the scaled signal is large, are identified. Then, the phase sequences having the maximum number of phase-reversed sequence words only for these positions are selected. Finally, the generic SLM procedure is performed by using only the selected phase sequences for the original input sequence. Simulation results show that the proposed scheme significantly reduce the complexity in terms of IFFT and PAPR calculation than the conventional SLM, while maintaining the PAPR reduction performance.