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Many new wireless applications such as public safety and social networking have been emerging in recent years. Those applications introduce the necessity of direct communications among devices or peers without core network or wireless routers, which is not well supported in current network infrastructures. While some existing technologies can support certain levels of direct peer-to-peer communications, they are context-oblivious and inefficient. This article proposes a context-aware proximity-based P2P (CA-P2P) wireless communication system architecture to enable context awareness for direct P2P communications. The main idea is to systematically incorporate appropriate context information in direct communication protocols to improve overall performance. One of the major features is application-based communication, which connects peers according to their common applications. Accordingly, radio resources can be managed more efficiently among and within different application groups. Specifically, the scheme proposed in this article includes several new mechanisms such as context-aware peer discovery and context-aware peer association. Simulation results demonstrate that the proposed context awareness system achieves fast and efficient peer discovery and peer association in terms of latency and overhead.