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In this paper, the issue of Bluetooth and IEEE802.11b coexistence in a heterogeneous environment is addressed by means of an integrated analytical approach. The methodology proposed carefully takes both physical (i.e., thermal noise, propagation, interference, modulation formats, and coding techniques) and medium access control (frequency hopping, packet structures, traffic loads) aspects into account. This model can be easily implemented when developing network simulators, thus avoiding the need of extensive bit level Monte Carlo simulations at the physical level. The mean packet error probability is evaluated as a function of the relative distance between the two systems for different conditions (e.g., propagation, packet type, traffic loading, etc). In particular, how the presence or absence of line-of-sight propagation significantly affects the coexistence distance is emphasized. Furthermore, for a fixed quality-of-service level we derive the coexistence domain of the two considered systems in terms of relative distance.