A method of maximum output power configuration with UE preference in carrier aggregation is provided. A UE configures multiple component carriers (CCs) with carrier aggregation for communicating with a serving base station in a mobile communication network. The UE determines channel condition of multiple serving cells over the corresponding multiple CCs. The UE then determines maximum output power for each CC based at least in part on the corresponding channel condition of each CC. Finally, the UE transmits power headroom report (PHR) for each CC to the serving base station, wherein the PHR is calculated based on the determined maximum output power. As a result, the reported PH information is channel condition dependent, which can be used by eNB for facilitating better transmission scheduling.