The present invention provides a method and system for controlling the data rate in packet based wireless communications. Then, using the probability of error, the invention calculates the throughput and drop probability for two or more data rates and selects the data rate with highest throughput. In one embodiment of the invention, the probability of error based on information passed back from the receiver regarding decoding errors. In another embodiment, the probability of error is based on acknowledgement packets returned by the receiver.