Transmit diversity, which was initially developed for noise-limited environments, has been promoted as a viable candidate for improving the link quality in both existing and future systems for wireless communication. However, to ensure efficient spectrum utilization, receivers operating within wireless multiuser networks must be robust not only to fading and noise but to interference from other system users as well. This work considers interference robustness aspects when transmit diversity, in the form of space-time block coding, is used in multiuser systems. Properties of the space-time block encoded signals such as code rate, block structure, diversity order, etc., and their implications on detection and interference rejection by means of noise whitening are discussed. To handle the presence of space-time block encoded interference, a space-time processing-based extension of an interference rejection combining algorithm is proposed. Results are presented indicating that transmit diversity based on space-time block codes (STBCs) of the linear dispersion type improve robustness against interference in terms of an increased diversity advantage. This can be achieved either by increasing the number of transmit antennas or by reducing the rate of the code. It is also shown, by analysis and by simulation examples, that the performance improvements obtained by using transmit diversity in multiuser systems may rapidly subside as the signal-to-interference ratio decreases. However, by using the proposed interference rejection scheme tailored to the space-time encoded structure, performance improvements of transmit diversity are also obtained in a multiuser environment.