In recent years, there has been considerable interest in studying intercloud with the aim of supporting interactions among different clouds, possibly managed by different service providers. The extension of intercloud to a mobile environment, called a »mobile intercloud system» is a relatively new research area. In this paper, we present a mobile intercloud system, which is developed based on the IEEE P2302 Intercloud architecture and inspired by the mobile Internet protocol. Basically a mobile terminal is associated with a home cloud in which a virtual mobile terminal can be set up together with the mobile applications and data. When a mobile terminal moves to a new area and joins a foreign cloud, certain mobile applications and data can be transferred to the foreign cloud. For data/files, we present a rule-based policy so that users can specify the rules for transferring data/files flexibly. A prototype has been developed to demonstrate the basic concept. For applications, we formulate a Markov decision process model to study how the applications should be transferred to minimize the overall cost. Analytical results are presented to provide valuable insights into the design of the mobile intercloud system.