Abstract: In order to settle the handoff problem resulted from deploying femtocell base stations in a macrocell, a new handoff algorithm for hierarchical cell networks was proposed. This algorithm makes a handoff judgment in light of signal strength received by users and signal power loss during transmission. When the received signal strength (RSS) can not work efficiently, the power loss serves as the auxiliary condition to improve the usage of femtocells and cut down the complexity of the new handoff algorithm. The simulation results show that the proposed algorithm doubles the number of handoffs compared with the conventional algorithm but reduces half the number of unnecessary handoffs compared with a handoff algorithm based on the combining RSSs from macrocell and femtocell base stations.