A system and method are disclosed for reducing interference in simultaneous wireless LAN (WLAN) and wireless personal area network (PAN) signal handling in mobile wireless terminals having both a WLAN and a PAN interface. The wireless terminal includes a first transceiver operating in the PAN network in a communications band and a first communications protocol transmitting first data units. The wireless terminal also includes a second transceiver operating in the WLAN network in substantially the same communications band and a second communications protocol transmitting second data units. The wireless terminal further includes a controller coupled to the first and second transceivers, assigning a higher transmission priority to the second data units than to the first data units when transmission of the second data units overlaps a first occurring transmission of the first data units, to abort transmission of the first occurring data unit. The controller assigns a higher transmission priority to the aborted first data unit than to the second data units when transmission of the second data units overlaps the retransmission of the aborted first data unit, to transmit the aborted first data unit.