An electronic device of determining proximity of a wireless external device is provided. The electronic device includes a transceiver, a sensor, and at least one processor, wherein the at least one processor is configured to transmit a first signal to the external device through the transceiver, acquire, when the first signal is transmitted, information about a user's gesture made in a vicinity of a sensor positioned within a certain distance from the transceiver through the sensor, wherein the first signal is distorted by the user's gesture and provided to the external device, receive, from the external device through the transceiver, a second signal generated as the external device copies the distorted first signal, and determine the proximity of the external device based on the second signal.