A simulation bed to investigate the feasibility of a CDMA based indoor residential system underlay that uses time division duplexing and dynamic channel allocation is described. The indoor system in question shares the same frequency band as the outdoor ANSI-008 based cellular PCS network and operates within its coverage area. Due to the TDD nature of the residential system, both the forward and reverse link signals are transmitted in the same frequency band in different time slots. Dynamic channel allocation (DCA) is used to select either the PCS uplink or the PCS downlink frequency band for the indoor system operation. The developed simulation bed measures the effects of the indoor system to the outdoor system and vice versa. System capacities, outages, DCA usage rates and blockage rates are measured using the simulator. The simulation results show that underlaying such an indoor residential system to the existing ANSI-008 PCS system is feasible. In a given geographical area, addition of such a system would ultimately increase the CDMA capacity substantially.