A method and system of dynamically updating presence, capabilities and identity information based on environmental conditions using environment information of a user of a mobile device. One or more wireless networks or devices or both are detected using at least one wireless interface of the mobile device. Thereafter, presence information of the user of the mobile device is generated based on the mobile device's location. Next, either a mode of the mobile device is set in accordance with the presence information or communication handling preferences are configured for the user of the mobile device based on the presence information or preferences of applications on the mobile device are configured.