In this paper, we analyze the performance of the virtual cell system[1] for the transmission of IP datagrams in mobile computer communications. A virtual cell consistsof a group of physical cells shose base stationsl are implemented b recote bridges and interconnected via high speed datagram packet switched networks. Host mobility is supported at the data link layer using the distributed hierachical location information of mobile hosts. Given mobility and communication ptems among physical cells, the problem of deploying virtual cells is equivalent to the optimization cost for the entire system where interclster communication is more expesive than intracluster communication[2]. Once an iptimal partitionof disjoint clusters is obtained, we deploy the virtual cell system according to the topology of the optimal partition such that each virtual cell correspods to a cluser. To analyze the performance of the virtual cell system, we adopt a BCMP open multipel class queueing network model. In addition to mobility and communication patterns, among physical cells, the topology of the virtual cell system is used to determine service transition probabilities of the queueing network model. With various system parameters, we conduct interesting sensitivity analyses to determine network design tradeoffs. The first application of the proposed model is to determine an adequate network bandwidth for base station networking such that the networks would not become an bottleneck. We also evaluate the network vlilization and system response time due to various types of messages. For instance, when the mobile hosts begin moving fast, the migration rate will be increased. This results of the performance analysis provide a good evidence in demonsratc the sysem effciency under different assumptions of mobility and communication patterns.