A novel and useful apparatus for and method of Bluetooth and WiMAX coexistence. The invention provides a system approach to achieving coexistence between Bluetooth and WiMAX transceivers collocated in a mobile terminal. The coexistence mechanism of the present invention is particularly suited to operation of WiMAX in the 2.3 GHz and 2.5 GHz frequency bands. In operation, the coexistence mechanism of the present invention utilizes multiple algorithms depending on the capabilities of the Bluetooth peer and the power save support level of the WiMAX base station. In the example embodiment presented herein, the coexistence mechanism is implemented in the MAC layer of the Bluetooth and WiMAX radio modules.