Abstract. In the near future, the telecommunication services provided by wireless netw.orks will be characterized by high throughput and flexibility. Today the challenge in this area is to find techniques which will make it possible to introduce multimedia capabilities into mobile communications. The application of a wireless network structure made up of pico-cells to solve this problem will cause an increase in the handover rate. Therefore, a major requirement in a wireless environment is to design an effective call admission control (CAC) strategy to minimize the handover drop probability. Another important requirement is to maximize network utilization, in terms OF the average number of channels used. The target of the paper is to detine an extension of the Guard Channel CAC strategy for adaptive-rate traffic sources, in such a way that both the handover drop probability and network utilization are optimized. In order to assess the effectiveness of the proposed CAC strategy, two Markov models of the system are introduced: one, from the network point of view, to evaluate global system performance, and another, from the user point of view, to evaluate the performance each user is provided with by the network. Numerical examplcs conclude the paper to analyze which factors most affect performance when the traffic bit rate is adaptive and the proposed admission strategy is applied.