In this paper, we propose a new power allocation algorithm for orthogonalized spatial multiplexing (OSM) systems over flat-fading multiple-input multiple-output (MIMO) channels. Compared to SVD-based transmission scheme, the OSM scheme exhibits a good system performance with lower complexity and feedback overhead. To further improve the performance in OSM systems with power allocation, we introduce a geometric approach on the Euclidean distance between the constellation points in the effective channel. Using this approach, we show that the optimal power allocation parameters in terms of the minimum distance can be obtained. Simulation results demonstrate that our algorithm provides a 5dB gain at a bit error rate (BER) of 10 -4 over that of no power allocation case with both QPSK and 16-QAM.