A method of recognizing proximity using a proximity sensor and a mobile terminal using the same are provided. The method includes detecting a key input by a user, projecting light in a state where an object does not approach a proximity sensor and measuring a light receiving amount of the projected light, extracting a compensation amount corresponding to the measured light receiving amount, setting a critical light receiving amount for determining proximity recognition by compensating the measured light receiving amount with the extracted compensation amount, and recognizing proximity of an object to the proximity sensor based on a preset critical light receiving amount. Thereby, even if the surrounding environment of a mobile terminal is changed, noise characteristic of the proximity sensor is influenced, and the mobile terminal is used for a long time, a proximity recognition distance of the mobile terminal is uniformly sustained.