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Presently Bluetooth (BT) is one of the widely used device for personal communication. As BT devices are operating in the unlicensed ISM band, they are often subjected to the interference from WLAN. The band width of BT (1MHz) is narrower compare to the bandwidth of WLAN (22MHz). So for coexistence purpose it is important to observe the performance of narrow band signal BT in presence of wideband interference WLAN and vice versa. As there are many work on the performance of WLAN in presence BT interference, the main focus in this paper is on performance of BT in presence of WLAN interference in AWGN, Rayleigh fading channel. Then comparison of the performance using interference avoidance technique like adaptive frequency hopping, power control for BT system is given. Finally a conclusion is drawn observing the simulation results on the technique which is more suitable for WLAN interference mitigation in BT system.