In this paper, we consider a two-tier downlink scenario, where femtocell users are interested in receiving both macrocell and femtocell information simultaneously at a single frequency (joint two-tier downlink reception). Unlike in conventional handsets, which use orthogonal schemes for accommodating two-tier downlink reception, we propose two non-orthogonal schemes based on precoding-aided spatial modulation (PSM) for handling cross-tier downlink interference. In both the proposed schemes, the femtocell information is conveyed as an active antenna index at the user (spatial symbol), while the macrocell information is conveyed as a phase shift keyed (PSK) symbol on the activated antenna. Appropriate precoders are designed at femtocell base station (FBS) and macrocell base station (MBS) to manage the cross-tier interference. We derive average transmit powers at the MBS and all FBSs for both the schemes. We also optimize the transmit powers of both the schemes at a given target signal-to-noise ratio (SNR). Further, we exploit the existing cross-tier interference as a source of artificial interference for enhancing the physical layer security of femtocell users. We derive secrecy rates of the proposed schemes, and corroborate the analytical expressions derived throughout the paper with simulation results. © 2002-2012 IEEE.