Techniques for computing and reporting channel quality indication (CQI) are described. In an aspect, a plurality of CQI computation methods may be supported, and each CQI computation method may indicate how CQI should be computed. One CQI computation method may be selected for use. CQI may then be computed and reported in accordance with the selected CQI computation method. In an exemplary design, a user equipment (UE) may obtain a selected method for computing CQI, which may be chosen based on the UE capability and/or other factors. The selected method may specify (i) CQI computation for a specific codeword among a plurality of codewords or (ii) CQI computation by averaging signal quality across a plurality of layers used for transmission. The UE may compute CQI in accordance with the selected method, send the CQI to a base station, and receive data sent by the base station based on the CQI.