A ray tracing model based on the method of images has been applied to study the propagation of radio waves in the regions of Copacabana and Ipanema in Rio de Janeiro. In such highly urbanized environments, it can be realistically assumed that propagation is restricted to a horizontal section of the street canyons characterized by the blocks of buildings. Several classes of rays, characterized by the number, type (reflection and diffraction), and order of occurrence of interaction with the lateral faces of the blocks are considered by the model. The directions of departure and arrival, as well as the amplitude and the time delay characterize each ray, considering its total length, as well as product of the coefficients associated with each interaction with the environment. In addition to analyzing the behaviors of the ray parameters considering both line-of-sight (LOS) and non line-of-sight (NLOS) situations, the capacity growth of multipleelement antenna arrays (MEAs) will be demonstrated for a narrowband system operating at 1.9 GHz. Indeed, multiple-input, multiple- output (MIMO) wireless communications systems, making use of smart antenna arrays at both ends of the communications link, has been receiving increased interest due to their high spectral efficiency and channel capacity. The effect of MIMO systems in the channel capacity will be studied for representative LOS and NLOS situations to understand how the results change as a function of the environment. It will be seen how the capacity scales with increasing signal-to- noise ratio (SNR) for a large but practical number of antenna elements at both transmitter and receiver. The increase in capacity with transmitter power, distance, delay and angular spreads for LOS and NLOS cases will also be presented, as well as a comparison of the results with those corresponding to a Rayleigh channel.