A method and system is provided for scheduling interference aware optimal uplink for device-to-device communication underlying LTE networks. The present application provides a method and system for scheduling interference aware optimal uplink for device-to-device communication underlying LTE networks, comprises registering a plurality of users equipment (UEs) with a single cell with one Evolved Node B (eNB) over the Long Term Evolution (LTE) network; initiating connection by the plurality of users equipment (UEs) with Evolved Node B (eNB); discovering device-to-device (D2D) communication between the actively connected plurality of users equipment (UEs); segregating the actively connected plurality of users equipment (UEs) in device-to-device and cellular users by the Evolved Node B (eNB); and scheduling the two-phase interference aware optimal uplink for device-to-device communication for segregated actively connected device-to-device (D2d) and cellular users by the Evolved Node B (eNB), underlying the Long Term Evolution (LTE) network.