Abstract： Kirkwood's variational method in the theory of liquids is extended to more general cell model of liquids. The incompleteness in Cohen's theory is thus overcome. It appears that the present theory is able to treat systematically the correlation of molecular motion in the cell model to any degree of approximation. Applied to the one-dimensional case, the theory gives exact result for the free energy. In the three-dimensional case, the lowest order approximation leads to Kirkwood's result, and the first order approximation yields Taylor's result.