A method and apparatus are disclosed. In an example from the perspective of a User Equipment (UE), the UE receives, via a Radio Resource Control (RRC) message, a resource configuration of a first configured grant to be used in RRC inactive state. The UE performs a first new transmission using the first configured grant in RRC inactive state. After the performing the first new transmission, the UE receives an uplink grant in RRC inactive state via Physical Downlink Control Channel (PDCCH). The UE determines whether the uplink grant is for performance of a second new transmission or for performance of a first retransmission. The UE performs the second new transmission using the uplink grant in RRC inactive state if the UE determines that the uplink grant is for performance of the second new transmission.