This paper presents an analysis of coverage and capacity for the multi-layer CDMA cellular system. The multi-layer CDMA system that shares a common frequency band consists of macrocells for outdoor users and picocells for indoor users. Though macrocells and picocells interfere with each other the capacity of the whole system can be increased, We have analyzed the effect of muual interference upon cell coverage soft handover areas and capacities. The parameters involved in the engineering of the system are discussed. The study results sow that we can control the service coverage of indoor picocells with the system parameters set properly. It is also show that the capacity of the whole system that the capacity of the whole system can be enhanced smoothly by deploying the indoor picocells within existing macrocells.