In this paper we propose an adaptive channel estimation scheme for Amplify and Forward (AF) two-way relay systems with frequency selective and fast varying channels. The modulation used is Orthogonal Frequency Division Multiplexing (OFDM). This adaptive filter is called Block Fast Array Multichannel 2D Recursive Least Square (BFAM 2D-RLS) filter. The complexity of this adaptive filter is comparable to that of Least Mean Square (LMS) algorithm while maintaining similar convergence rate as that of the standard Recursive Least Mean Square (RLS) algorithm. Computer simulation using Matlab is performed to analyse the performance of BFAM 2D-RLS filter in estimating fast varying Vehicular-A (Veh-A) channel. The results obtained is compared with slow varying channels. © 2015 IEEE.