A method and apparatus for performing codebook-based precoding in a Multiple Input Multiple Output (MIMO) wireless communication system are provided. In a method for operating a Base Station (BS) in a MIMO wireless communication system, a reference signal including pilot signals, which are divided by a predefined number of bands and are multiplied by respective codes in a codebook, is transmitted. One or more Mobile Stations (MSs) destined for spatial multiple access are selected using an index of a band and CQI of the band corresponding to the index, which are fed back from one or more MSs. A precoding matrix is generated to process data streams of the selected one or more MSs.