Abstract: Multiple-input multiple output (MIMO) technology can dramatically improve system capacity and spectrum efficiency, and has been applied in the next generation mobile communication network and broadband wireless networks as a core technology. In practice, especially in multi-user cases, the co-channel interference between MIMO links seriously affects the MIMO capacity performance. Therefore, we need to optimize the power allocation scheme of MIMO system to optimize the system capacity. In this paper, we present the signal model of MIMO system with co-channel interference and capacity analysis method for co-channel MIMO system based on maximizing mutual information. In the R_IN-R_SN space, the system optimization problems are classified into 4 situations. For each situation, the feasible optimized power allocation schemes and the applicability of corresponding scheme are proposed. Finally, we point out the main problems and further research directions in this research field.