In this paper, we investigate the conventional windowed DFT-based channel estimation for OFDM systems with guard bands. The conventional method suffers from the edge effect and the pilot position mismatch. In order to solve the problems, we propose an enhanced DFT-based channel estimation using virtual interpolation with guard bands prediction, where linear minimum mean square error (LMMSE) smoothing/prediction and circular frequency shifting are employed. This technique can efficiently mitigate the edge effect caused by the DFT of the truncated channel impulse response and compensate the pilot position mismatch that pilot symbols are not allocated at the first and the last subcarriers in a useful band. Simulation results show that the proposed method has about 5 dB SNR gain at BER=10-3 compared to the conventional method and is as good as the frequency-domain LMMSE method.