Problem: When System clock is selected as P1 in PD5.0 SP5, PSoC does not work. Work Around: Following is the work around: Select SysClock Source as Internal. Set drive mode for P1.4 as High-Z. Now you have two options (you can use either of them): 1. Write instruction OSC_CR2 = 0x06; in main.c. It will shift to System Clock to External Clock from IMO 2. Open boot.tpl file and add following lines in boot.tpl below line "lcall LoadConfigInit". M8C_SetBank1 mov reg[OSC_CR2], 6 M8C_SetBank0 Now your code in boot.tpl should like following near above line: lcall LoadConfigInit M8C_SetBank1 mov reg[OSC_CR2], 6 M8C_SetBank0 It will shift to System Clock to External Clock from IMO But make sure that you keep SysClock Source as Internal and drive mode for P1.4 as High-Z in device editor. This issue will be fixed in PD5.0 SP6.