A method and apparatus are disclosed. In an example from the perspective of a User Equipment (UE), the UE receives an indication from a base station, wherein the indication is indicative of monitoring a power saving signal in one or more monitoring occasions and at least one monitoring occasion of the one or more monitoring occasions is associated with a Discontinuous Reception (DRX) ON duration and is within Active Time associated with the UE. The UE does not monitor and/or skips monitoring the power saving signal in the at least one monitoring occasion. The UE monitors Physical Downlink Control Channel (PDCCH) during the DRX ON duration.