The UMTS terrestrial radio access (UTRA) is composed of a frequency division duplex (UTRA-FDD) mode and a time division duplex ( UTRA-TDD) mode. In UTRA-TDD the uplink and downlink are on the same carrier frequency. This creates additional interference scenarios, to be precise: MS虠MS and BS虠BS interference. Since power leakage between adjacent carriers cannot be avoided this inherent property of TDD has an impact on adjacent channel interference (ACI) and thus on cell capacity. The power leakage results from transmitter mask imperfections and non-ideal receiver filters. From interference power measurements using a 7th and a 9th order Butterworth receiver filter the relationship between carrier spacing and adjacent channel interference power ratio (ACIR) is established This relationship is used to find the best carrier spacing in UTRA-TDD considering several cell deployment scenarios. It is found that the ACIR must be greater than 30 dB, but the capacity gains from an ACIR greater than 40 dB converge rapidly