Techniques for centralized control of peer discovery pilot transmission are described. In an aspect, a designated network entity (e.g., a base station or a network controller) may control transmission of peer discovery pilots by stations located within its coverage area. In one design, the network entity may receive signaling triggering peer discovery pilot transmission. The network entity may direct each of at least one station to transmit a peer discovery pilot to allow one or more stations to detect the at least one station. The peer discovery pilot may include at least one synchronization signal or at least one reference signal. The network entity may receive pilot measurements from the one or more stations for peer discovery pilots from peer stations and/or reference signals from base stations. The network entity may determine whether or not to select peer-to-peer communication for two stations based on the pilot measurements.