In wireless sensor networks (WSNs), the performance and lifetime are significantly affected by the indoor propagation and the interference from other technologies using the 2.4 GHz band. Next to an overview of the propagation and coexistence issues in the literature, we present a model for analysing these effects in WSNs. We also present our measurements results on the indoor propagation, the interference of the microwave oven (MWO) and their impact on the performance of the WSN. The propagation measurements reveal significant influence of the multipath: changing a node position with a few centimetres or changing the communication channel can lead up to 30 dB difference in the received power. The power leakage of MWO has been observed around - 20 dBm at 1 m distances to the oven. This leads to extra retries of the 802.15.4 messages which matches our simulation results: the packet success ratio at first try decreases to 30-40 %, which increases the average active time of the sensor, closely located to the MWO. We observe that the ON-OFF pattern of the MWO could be exploited by WSNs to improve the performance.