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In wireless multihop ad hoc networks, the hidden terminal problem severely degrades the overall performance. On the other hand, most existing solutions cause larger blocking areas and hence a more severe exposed-terminal problem. In this paper, we present a new Enhanced Busy-tone Multiple Access (EBTMA) medium access control (MAC) protocol. The proposed protocol minimizes the negative impact of both the hidden-terminal and the exposed-terminal problems with the assistance of an out-of-band busy tone signal. The new protocol can also enhance the reliability of packet broadcast and multicast which are very important for many network control functions such as routing. Unlike the previous busy-tone schemes, such as the original Busy-tone Multiple Access (BTMA) protocol, our proposed protocol uses a non-interfering busy- tone signal in a short period of time, in order to notify all hidden terminals without blocking a large number of nodes for a long time. Our analysis, verified by simulation results, demonstrates that the proposed MAC protocol outperforms the existing ones and it can greatly improve the performance of wireless ad hoc networks. In addition, the proposed EBTMA protocol can co-exist with the existing 802.11 MAC protocol, so it can be incrementally deployed.