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In contrast to traditional frequency hopping techniques, adaptive frequency hopping (AFH) is a low cost and low power solution to avoid interference dynamically. While each AFH algorithm proposed previously is shown to be efficient, a detailed performance analysis of various AFH mechanisms under realistic resource constraints is yet to be done. In particular, based on our performance study on Bluetooth systems presented in this paper, we have found that the AFH mechanism adopted by IEEE 802.15 task group 2 (TG2) is very sensitive to memory and power limitations. We then propose an interference source oriented adaptive frequency hopping (ISOAFH) approach based on a cross-layer design, in which the baseband layer of Bluetooth considers not only the instantaneous channels condition but also the physical layer transmission characteristics of potential interference sources in determining the hop sequence. In our simulations using detailed MATLAB Simulink modeling, we find that our proposed method is much more robust in that it is insensitive to memory and energy constraints. Indeed, our approach generally achieves a lower collision rate and higher ISM spectrum utilization.