The proliferation of wireless ad-hoc networks especially wireless LAN (IEEE 802.11b Standard) in the commercial market in recent years has reached a critical mass. The adoption and strong support of wireless IEEE 802.11 standard, coupled with the consequent decline in costs, has made wireless LAN deployment as one of the fastest growth area in communication access technology. With the ever increasing use of wireless LAN technology the various networks are reaching their full capacity in terms of network throughput, number of users and interference level in the wireless channel. In this thesis work I propose to the use smart antenna technology and a power management scheme in the wireless ad-hoc networks to increase the network capacity in terms of throughput, number of simultaneous communication and to lower the average transmit power and consequently co-channel interference. Power management scheme can be used to maximize the power efficiency of the transmitter by choosing an optimum transmit power level. Smart antenna or adaptive antenna array technology has reached a level of sophistication that it is feasible to use it on small mobile terminals like handheld PDA, LAPTOP and other mobile devices with limited battery power. The simulation results of various ad-hoc network scenario shows that there are significant gains to be had if these technologies can be integrated in the existing wireless LAN physical layer and/or in the standard them self. Smart antennas along with slight modification in channel access scheme reduce co-channel interference dramatically and increases the number of simultaneous transmissions hence improves network throughput. Power management algorithm is shown to improve average transmission of a node. We present a mathematical framework to characterize the outage probability of cellular mobile radio system with selective co-channel interference receiver in overloaded array environments. The mathematical framework outlines a general numerical procedure for computing the probability of outage of a cellular mobile radio system that is equipped with a smart antenna to suppress a few strongest co-channel interferers (CCI) out of a total of NI active interferers by null steering. / Master of Science