A method of a portable electronic device for self-calibration of a proximity sensor. A background measurement is obtained by the proximity sensor and a detection threshold of the proximity sensor is adjusted based on the background measurement. The background measurement is a measure of a received signal when no signal is transmitted by the proximity sensor, and the detection threshold is associated with a sensitivity of the proximity sensor to environmental conditions. A source signal is emitted by the proximity sensor based on the adjusted detection threshold of the proximity sensor, and a return signal is received by the proximity sensor corresponding to the source signal. A function of the portable electronic device may be performed base don the received return signal.