Recently, a so-termed chip-interleaved block-spread (CIBS) CDMA system has been introduced for cellular applications in the presence of frequency selective multipath channels. In both uplink and downlink operations, CIBS-CDMA achieves multiuser-interference (MUI) free reception within each cell. This paper focuses on the cellular downlink configuration, and analyzes the performance in the presence of inter-cell interference and soft handoff. Performance results favor the proposed CIBS-CDMA over the conventional DS-CDMA with chip equalizers.