1 (2 layer size) pkg. yellow cake mix
1 1/3 c. water
1/4 c. oil
1 c. chopped walnuts or pecans
1 (4 serving size) pkg. Jello vanilla instant pudding
4 eggs
2 c. coconut

Blend cake mix, pudding mix, water, eggs, and oil in large mixer bowl. Beat at medium speed of electric mixer 4 minutes. Stir in coconut and walnuts. Pour into 3 greased and floured 9 inch layer pans. Bake at 350 degrees for 35 minutes. Cool in pans 15 minutes; remove and cool on rack. Fill and frost with Coconut - Cream Cheese Frosting.

COCONUT - CREAM CHEESE FROSTING:

4 tbsp. butter
1 (8 oz.) pkg. cream cheese
3 1/2 c. sifted confectioners' sugar
2 c. coconut
2 tsp. milk
1/2 tsp. vanilla

Melt 2 tablespoons butter in skillet. Add coconut; stir constantly over low heat until golden brown. Spread coconut on absorbent paper to cool. Cream 2 tablespoons butter with cream cheese. Add milk and sugar alternately, beating well. Add vanilla; stir in 1 3/4 cups coconut. Spread on tops and sides of cake layers. Sprinkle with remaining coconut.