An electronic device may include wireless circuitry that is configured to transmit wireless signals during operation. A maximum transmit power level may be established that serves as a cap on how much power is transmitted from the electronic device. Adjustments may be made to the maximum transmit power level in real time based on sensor signals and other information on the operating state of the electronic device. The sensor signals may include motion signals from an accelerometer. The sensor signals may also include ultrasonic sound detected by a microphone. Device orientation data may be used by the device to select whether to measure the ultrasonic sound using a front facing or rear facing microphone. Maximum transmit power level may also be adjusted based on whether or not sound is playing through an ear speaker in the device.