Disclosed is a system and method for channel allocation in a multi-band wireless network. The system includes microcell base stations, at least one macrocell base station, a mobile station, and a channel allocation center. When the mobile station makes/receives a call or executes a handover, the channel allocation center uses repacking on demand (RoD) scheme to allocate a radio channel of either a macrocell base station or a microcell base station to the mobile station. RoD has the following steps. First, a microcell channel is trying to be allocated if available. If no microcell channel is available, a macrocell channel is then trying to be allocated. Third, if no macrocell channel is available, repacking is performed to execute a handover of another mobile station's call from the macrocell to another microcell, and to allocate a reclaimed macrocell channel to the mobile station. Otherwise, no repacking call is available and the mobile station is blocked or forced terminated. By the invention, call blocking probability and call handover rate of the mobile stations in the multi-band wireless network can be reduced, and thus users' satisfaction can be enhanced.