The CDMA system can provide more capacity than the conventional AMPS system and the hierarchical layer of cells is required for system design in the future. However, the problem is whether the same RF channels used in a CDMA underlaying macrocell/microcell structure also obtain high capacity as in the homogeneous structure. This paper investigates the interference of uplink and downlink from both the microcell and macrocell in a hierarchical structure. Downlink power control is also considered. The results show that the capacity of microcell in a hierarchical structure is 23 per cent less than in homogeneous cells. The capacity of macrocell in a hierarchical structure decreases dramatically in proportion to the number of microcells. The capacities of the microcell and macrocell are limited in downlink, and uplink, respectively. In addition, more efforts for microcell should be made, such as more power is transmitted by microcell basestation if the same RF channel is used in a hierarchical structure. The results suggest that different RF channels are used in a two-tier cellular environment.