ATM AAL2 has been selected as the transmission technology in the radio access network of UMTS systems. To suit AAL2 to a network where support for soft handoff is essential, an additional switching level on top of ATM has been developed. AAL2 Signaling is a new protocol, which is capable of handling on-demand, switched AAL2 connections. For supporting soft handoff, the most important requirement is fast connection setup. A generic model for an AAL2 switch is presented in this paper, and a new method is proposed for optimizing the distribution of processor resources between the functional entities of the switch in order to achieve the fastest possible connection setup time. Then AAL2 switching networks, resembling the UMTS Terrestrial Radio Access Network, are built using an optimized AAL2 switch model, and the performance of the AAL2 signaling protocol is evaluated by simulation. It is shown that further reduction of the connection setup time can be achieved by introducing priority.