IEEE 802.11 power save mode and other power management mechanisms while reducing the power consumption of a wireless subsystem may significantly degrade application performance increasing overall system power. A new power management algorithm, codenamed Gibraltar, which adapts to application level network behavior and current network conditions, has been developed to reduce 802.11 power consumption and to limit application delays. Gibraltar algorithm was implemented as an NDIS intermediate driver for the Intel PRO/Wireless 2200BG miniPCI card and experiments were conducted for web browsing and email applications. Measured results demonstrated that Gibraltar is very effective in managing power of a wireless subsystem and limiting application delay. For example, for web browsing when compared to 802.11 power save mode, Gibraltar reduces power consumption by 28% and delay by 19%. Further, Gibraltar is able to consistently reduce system energy consumption across applications and device types providing a viable solution for 802.11 power management.