How can i communicate atmega16 with X-Bee module S2?

I tried using USART. But cant directly communicate with it.
My atmega16 is driving at 5V and X-Bee is driving at 3.3V

You will need a logic level converter. If you have the know how a simple set of resistors can do the job. For a pre-made solution try the spark fun unit here: https://www.sparkfun.com/products/8745