Increasing user demand for the more bandwidths in wireless communications has motivated a new challenge to utilize the benefits of wireless ATM technology This paper focuses on how to provide IP services to a mobile user over wireless ATM networks. By enhancing the NHRP standard, several shortcomings are improved that are resulted from the naive combinations of Mobile IP over ATM and IP over wireless ATM. This paper presents a mobile location management algorithm that is referred to as the Mobile NHRP scheme. The mobile tracking procedure and the mobile locating procedure are explicitly defined in the proposed scheme. On the locating procedure, the source station may obtain the current location of the destination from NHSs(Next Hop Servers). Therefore the optimized connection can be setup directly. The total costs per move and per setup over ATM/IP overlaid networks are estimated.