Abstract.Reducing the location update cost has been a critical research issue since the location update process requires heavy signaling traffics. One of the solutions is employing the hierarchical structure in cellular networks to reduce the location update cost. This paper is not only to measure the average location update cost in cellular networks using the hierarchical structure but also to determine the degree of the hierarchy which minimizes the location update cost. The paper proposes an advanced analytical model to obtain the optimal hierarchy in cellular networks, considering the update rates of the two registers, HLR and VLR, as well as the update delays for them. Also, the paper provides the threshold values as a guideline for the network administrator to design the optimal hierarchical structure in cellular networks.