A method and system for collocated IEEE 802.11 b/g WLAN, and Bluetooth (BT) with FM in coexistent operation are provided. A single chip comprising an integrated BT radio and an integrated FM radio in a coexistence station may generate a priority signal to disable WLAN transmissions in a WLAN radio when a BT HV3 frame is available for transmission. When the priority signal is asserted, an exponentially growing retransmission backoff mechanism in the WLAN radio may be disabled. Moreover, when the BT radio and the WLAN radio are enabled for coexistence operation, a WLAN fragmentation threshold in the WLAN radio may be modified based on a WLAN modulation rate and the BT HV3 frame duration. An on-chip processor that time multiplexes FM and Bluetooth data processing may be utilized to control the BT radio operation and the FM radio operation in the single chip.