This paper presents an approach that uses relaying to increase CDMA cellular capacity (spectral efficiency). The key insight is that, since the power received by the mobile falls off rapidly, as a function to distance to the base station, relaying could potentially be used to eliminate the out-of-cell interference, thus increasing the cellular capacity. However, as the paper shows, achieving the increase in capacity requires a specific relaying architecture, which can successfully control the interference at the relay stations. This architecture is shown to achieve up to 20 increase in CDMA cellular capacity, when shadowing effects are absent.