Many dynamic channel allocation (DCA) schemes for mobile networks have been studied. In this paper we take a look at the advantages and disadvantages of different DCA schemes in wireless ATM (asynchronous transfer mode) with new MAC (medium access control) protocol. To support wireless ATM, the future system would be microcellular or picocellular with a large number of base stations. The centralized DCA algorithm would not be suitable due to being neither robust nor scalable. This paper describes a cell-based distributed dynamic channel allocation algorithm with reduced message complexity and carrier acquisition delay.