Peripherals and data processing systems are disclosed which can be configured to interact based upon sensor data. In one embodiment, a peripheral, which is configured to be used with a data processing system, includes an interface to couple the peripheral to the data processing system, and at least one sensor, such as a proximity sensor, to sense a user of the peripheral, and a processor coupled to the interface and to the at least one sensor, wherein the processor configures the peripheral in response to data from the at least one sensor. The peripheral may communicate sensor data from its sensors to the data processing system, which may be a wireless PDA, and the data processing system analyzes the sensor data from its sensors and from the peripheral's sensors to decide how to configure the peripheral and/or the data processing system based on the sensor.