While mobile handheld devices, such as cell phones and PDAs, provide productivity benefits, they also pose new risks. A vital safeguard against unauthorized access to a device’s contents is authentication. This paper describes a location-based authentication mechanism that employs trusted servers called policy beacons, which are used to provide location data and control device behavior. Mobile devices determine their proximity to available policy beacons and upon validation assume the designated organizational policy. The mechanism is designed to take advantage of Bluetooth functionality built into many current handheld devices used in organizational settings.