Summary: In this paper, the traffic performance of dynamic channel assignment (DCA) in cellular mobile system with hand-off is investigated. A traffic model for cellular system incorporating hand-off is established first. Under the framework of the model, a hand-off priority scheme is developed to reduce the forced termination of calls in progress. This paper analyses and derives the traffic performance bound for DCA strategies with hand-off by extending the maximum packing (MP) scheme to include the hand-off procedure. For practical implementation, a distributed DCA algorithm (DDCA) is also proposed. A non-priority scheme and the proposed priority scheme can be combined with either MP or DDCA. It is shown that the simulation results of DDCA scheme are comparable with the analytical bounds given by MP for both the non-prioritized case and prioritized case. A reasonable trade-off between the new call blocking probability and forced termination probability can be achieved by using the proposed prioritized scheme in DCA.