A method of handling proximity information transmission for a mobile device in a wireless communication system is disclosed. The method comprises initiating a handover procedure triggered by receiving a handover command or an radio resource control (RRC) connection re-establishment procedure, detecting a closed subscriber group (CSG) cell of a whitelist in the mobile device, wherein the whitelist provides a list of accessible CSG cells for the mobile device, and determining whether to perform the proximity information transmission according to an RRC message received from a network of the wireless communication system, wherein the RRC message includes a configuration of the proximity information transmission.