Abstract: This paper analyzes the feature of W-CDMA downlink OVSF code. A novel dynamic sequential allocation algorithm is presented according to code blocking ratio in the stochastic allocation. Low level codes are allocated firstly, and codes in the same level are allocated sequentially by order from low to high. The algorithm flow and system implemen-tation is specified. Finally, theoretical analysis and system simulation are presented. It is proved that it greatly reduces the code blocking probability and system overhead , which is valuable for engineering applications.