This invention relates to a method and arrangement for controlling transmission power in a mobile communications system, and to a network element. In the method according to the invention a certain target level is defined for a value representing the quality of a signal, which target level should be reached by the received signal. According to the invention this target level is advantageously limited so as to be smaller than or equal to a first predetermined limit value and/or greater than or equal to a second predetermined limit value. In accordance with the invention the quality of the signal may be measured e.g. by means of an SIR value. In the method according to the invention the quality of the received signal is checked and, based on the check, a first SIR target level is given to a comparing element (21). By means of the comparing element (21) it is ensured that the said first SIR target level falls within predetermined limits. Based on the comparison, a final SIR target level is given to a power control element (12) which produces a power control signal in order to adjust the transmission power.