Adaptive optimization of the notch bandwidth of a lattice based adaptive infinite impulse response (IIR) notch filter is presented. The filter is used to improve the performance of a direct sequence spread spectrum binary phase shift keying (DSSS BPSK) communication system by suppressing the narrow-band interference at the receiver. A least mean square (LMS) algorithm used to adapt the notch bandwidth coefficient to its optimum value that corresponds to the maximum signal to noise ratio (SNR) improvement factor is derived. Bit error rate (BER) improvement gained by the system using the optimized filter is shown by analytical and computer simulation.