A proximity sensing method of a portable terminal and a proximity sensing apparatus thereof are provided. The proximity sensing method of a portable terminal with an illumination sensor includes determining an output of the illumination sensor, determining that the portable terminal is proximate to an object when the output of the illumination sensor has a set pattern, and determining that the portable terminal is not proximate to the object when the output of the illumination sensor does not the set pattern. The proximity sensing method of a portable terminal may support a proximity sensing function using an illumination sensor instead of a proximity sensor to reduce a manufacturing cost of the portable terminal. In addition, since the method does not need a separate proximity sensor, it may address a lack of mounting space problem.