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As sensor nodes are subject to strict power limitations and often deployed in harsh environments, there is significant potential for a node to be hidden from another node. The impact of hidden nodes on performance of the IEEE 802.15.4 low-rate wireless personal area network protocol is evaluated. At lower Tx power, as a result of hidden nodes, there are more collisions in the network increasing the cost of packet delivery. The simulation results indicate that there exists an optimum transmission power that minimizes the impact of hidden nodes, and it depends on factors such as network load, desired throughput and beacon order. Results indicate that additional throughput gain and lower cost per packet delivered can be achieved by increasing the beacon order at higher Tx power.