Cloud radio access networks (C‐RANs) are promising technological paradigms to improve capacity and extend coverage. However, the severe interference resulting from high density deployment of remote radio heads (RRHs) prevents to achieve high spectrum efficiency. How to mitigate the interference is a key challenging work. This paper investigates the cooperative interference management among RRHs in C‐RANs. By forming coalitions and performing non‐coherent joint transmission within a coalition, the intra‐coalition interference among RRHs can be successfully suppressed. Considering that RRHs are selfish and rational, in this paper, the cooperation of RRHs is formulated as a coalition formation game scheme, where the necessary conditions for an RRH to cooperate are derived. To find the solution for the proposed game, an enhanced concept of defection order is proposed, based on which a self‐optimal coalition formation algorithm is proposed. The performances of the proposed algorithm, in terms of convergence, complexity and fairness, are analysed as well. Simulation results show that our proposed algorithm yields significant improvements of system performance compared with both the non‐cooperative scheme and the conventional broadcasting‐based coalitional scheme.Copyright © 2014 John Wiley & Sons, Ltd.