The rapid growth of mobile wireless data service continues to stimulate the investment and expansion of high-rate and bandwidth-efficient wireless network systems. High volume data traffics in modern wireless system can lead to network overload, congestion, and process delay, severely straining the limited resource and capability of cellular networks. As a result, new connection modes such as device-to-device (D2D) has emerged as potential means to alleviate traffic load on radio network controllers (RNC) and eNodeBs (eNBs). We investigated several technical aspects critical to D2D communications as an underlay within existing cellular networks. · Neighbor Discovery: One of the first steps in setting up D2D links involves pairing UEs that are in close proximity. This is accomplished during neighbor discovery process, where UEs will identify their neighbors for potential direct-link setup. To facilitate the deployment of D2D functionality to standard LTE cellular systems, it is necessary to explore neighbor discovery opportunities in existing LTE infrastructure. We developed neighbor discovery methods that are compatible with current protocols in 4G LTE networks. · Cochannel Interference Management: D2D communications can improve spectral efficiency of the cellular system by allowing D2D links share the same spectrum with cellular link. However, it also leads to a critical problem of interference management. As more advanced multi-antenna user equipment becomes widespread, precoding serves as an effective technique to combat cochannel interference. We proposed practical precoder selection strategies that utilize existing LTE codebook. To overcome channel estimation error, robust precoding techniques are further developed to guarantee cellular outage requirements within D2D underlaid cellular systems. · Resource Allocation: Resource allocation is an important topic for effective interference management across the network. For example, the eNB can allocate cellular resources to direct links that are far apart so as to reduce cochannel interference. We developed an efficient algorithm that optimizes resource allocation of D2D links across multiple D2D modes and cellular channels. With practical consideration of statistical CSI, we provided a general framework for optimizing channel and power allocation of D2D underlay with applicability to various channel fading models. Neighbor discovery, cochannel interference management and resource allocation are three successive, vital steps in setting up D2D communications in the cellular system. We proposed technical solutions to each phase with an emphasis on their compatibility with existing system architecture. Our study discloses huge potential of D2D as a practical solution to boost performances of cellular networks.