This paper considers the effects of simultaneous correlated multipath fading and shadowing on the performances of a signal-to-interference ratio (SIR)-based dual-branch selection combining (SC) diversity receiver. This analysis includes the presence of cochannel interference. A generalized fading/shadowing channel model in an interference-limited correlated fading environment is modeled by generalized-K distribution. Closed-form expressions are obtained for probability density function and cumulative distribution function of the SC output SIR, as well as for the outage probability. Based on this, the influence of various fading and shadowing parameter values and the correlation level on the outage probability is examined.