The objective of this chapter is to provide a general and flexible analysis method for the capacity of a wireless ad hoc network. First of all, the total capacity of a typical ad hoc network is defined, characterized and formulated as a function of the cumulative distribution function (CDF) of the received SIR. Then, a closed form expression for the CDF of signal to interference power ratio (SIR) is approximated, which directly results in a closed form solution for the total network capacity. Among various capacity metrics, the focus of this chapter is on the total outage capacity as a practical example. The effect of the outage threshold, β, on the total capacity of the network is studied and the optimum β that maximizes the capacity is determined.