Aspects of a method and system for adaptive tone cancellation for mitigating the effects of interference are provided. In this regard, an Ethernet PHY may receive one or more signals via a corresponding one or more physical channels and generate one or more estimate signals, each of which approximates interference present in a corresponding one of the received signals. The Ethernet PHY may subtract each one of the estimate signals from a corresponding one of the received signals. The subtracting may occur at the input of one or more slicers in the Ethernet PHY. The received signals may be processed via one or more equalizers in the Ethernet PHY. A decision output of a slicer in the Ethernet PHY may be subtracted from one of the said one or more received signals, and a signal resulting from the subtraction may be utilized to generate the one or more estimate signals.