Abstract-Traditional design rules for cellular networks are not directly applicable to code division multiple access (CDMA) networks where intercell interference is not mitigated by cell placement and careful frequency planning. For transmission quality requirements, a minimum signal-to-interference ratio (SIR) must be achieved. The base-station location, its pilot-signal power (which determines the size of the cell), and the transmission power of the mobiles all affect the received SIR. In addition, because of the need for power control in CDMA networks, large cells can cause a lot of interference to adjacent small cells, posing another constraint to design. In order to maximize the network capacity associated with a design, we develop a methodology to calculate the sensitivity of capacity to base-station location, pilot-signal power, and transmission power of each mobile. To alleviate the problem caused by different cell sizes, we introduce the power compensation factor, by which the nominal power of the mobiles in every cell is adjusted. We then use the calculated sensitivities in an iterative algorithm to determine the optimal locations of the base stations, pilot-signal powers, and power compensation factors in order to maximize capacity. We show examples of how networks using these design techniques provide higher capacity than those designed using traditional techniques.