In this paper, a novel spatial modulation (SM) with transmit antenna selection (TAS) based on maximizing channel capacity is proposed. Comparing to the conventional TAS technique, the proposed TAS considers the channel capacity of the MIMO channel with antenna selection. The optimal antenna set selection is applied to SM by taking account of the all possible sets, and then, a sub-optimal antenna set selection is also proposed for reducing the computational complexity of the optimal method. Computer simulations show that the proposed TAS significantly outperforms the existing SM scheme based on the magnitude of the channel vectors in terms of bit error rate (BER) in various environments.