A system and method for switching a session of a User Equipment (UE) in a wireless communication system are provided. According to the method, if the UE performs a handover from a macro base station of a macro cell to a femto base station of a femto cell, a femto base station transmits a path switch request message, which includes a serving gateway relocation Information Element (IE), to a Mobility Management Entity (MME) of the macro cell, in order to request a switching from an existing session of the UE to a new session managed by the femto base station. Then, in response to the path switch request message, the MME switches the existing session of the UE to the new session and transmits a path switch approval message to the femto base station. The serving gateway relocation IE includes information requesting relocation of a serving gateway of the UE to a femto serving gateway within the femto cell.