This paper considers the performance of adaptive interference cancellation applied to a CDMA microcellular environment, by employing a circular cell geometry and a closed form expression for the Bit Error Rate of a CDMA system with interference cancellation to analyze the effect of out-of-cell interference. Results are presented which indicate that out-of-cell interference will severely limit the benefits of interference cancellation in a multicellular system. Attempts to cancel all out-of-cell interference will further degrade performance. However, the use of selective interference cancellation in which only the strongest out-of-cell interferers are cancelled may result in significant performance enhancement. These results agree closely with those obtained using a hexagonal geometry.