In this paper, a novel approach to the problem of estimating the average channel capacity (in the Shannon sense) assigned to each user of a spread spectrum (SS) multiple-input multiple-output (MIMO) system operating in a Rayleigh fading environment, is presented. The analysis leads to a closed-form expression which fully conforms to the upper bound of the channel capacity value of a non-fading AWGN channel when the transmitted signal bandwidth tends to infinity proving the validity of the described analysis. Copyright © 2006 John Wiley & Sons, Ltd.