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We propose adaptive resource allocation algorithms for dynamic time division duplex (D-TDD) systems in wireless cellular networks. Recently, D-TDD has gained much attention as an efficient duplex scheme for high-speed data communications, because its adaptive switching ability enables a system to obtain statistical multiplexing gain by exploiting dynamic and asymmetric data traffic. However, it has been noted that strong cochannel interference can be present due to adaptive switching in a cellular network that uses frequency reuse. To suppress the effect of strong cochannel interference and obtain the benefit of D-TDD, we employ a time slot allocation (TSA) strategy along with sector antenna layouts. In addition to bandwidth adaptation to the dynamic and asymmetric traffic pattern, we also change the transmission mode based on the channel state of each link. For each time slot, the modulation level can be adaptively selected from multilevel transmission modes, satisfying the required packet error rate (PER) performance. Hence, the algorithm not only suppresses cochannel interference by co-operative time slot allocation, but also adopts multi-level transmission modes, with different modulation formats and coding for each time slot, so that maximum spectral efficiency can be achieved. Simulation results are presented to show the performance of these systems.