First, the operating principles of TDCS transmitter and receiver are analyzed based on the basic idea that the system can avoid interference by cooperative sense of transceiver. The Average Bit Error Probability of system in Interference Suppression with MPSK modulation is derived mathematically after the transmitting and receiving mathematical model with symmetrical spectrum was given out. Then, the mechanism of Interference Suppression in TDCS is analyzed and it is found that the system performance will suffer from loss in two aspects: transmitting power loss and receiving additional white noise and interference power. Finally, based on MATLAB, the performance of interference suppression is simulated under conditions of fundamental functions mismatch, single tone, multi-tone and partial spectrum band interfering. The results of simulation and the theoretical results are identical, and the performance of TDCS are better than Direct Sequence Spread Spectrum system in single tone, multi-tone and partial spectrum band interfering.