An apparatus and method for adaptively adjusting a target Received Signal Strength Indicator (RSSI) for Automatic Gain Control (AGC) in a full-duplex relay apparatus with an interference cancellation function. A Signal to Interference Ratio (SIR) estimation block estimates an SIR based on an interference signal estimated from a received signal and an interference-cancelled signal determined by cancelling the estimated interference signal from the received signal. A target RSSI determination block determines a target RSSI according to the estimated SIR. An AGC block adjusts a gain for the received signal based on the determined target RSSI.