This paper describes a CDMA cellular system based on adaptive interference cancellation (CDMA-AIC) with a large capacity. In the CDMA-AIC, each base station employs a single-user type adaptive interference canceller (AIC), which consists of a fractionally chip-spaced code-orthogonalizing filter (COF) and a coherent detector. The AIC adaptively removes power-dominant multiple-access interferences (MAIs) in the cellular system, regardless of whether they are intra-cell interferences or inter-cell interferences, without any information about them, such as spreading codes, signal received timings and channel parameters. Evaluation under the multiple-cell environment demonstrates that the reverse link capacity of the CDMA-AIC with QPSK modulation is 3.6 times as large as the capacity of the CDMA without MAI cancellation. Further, the capacity is less sensitive to transmission power control errors than that of the conventional CDMA systems.