In Mobile Ad Hoc Networks (MANETs), power control is necessary in order to reduce power consumption rates, avoid collisions within packets, increase spatial throughput of the system and to reduce contention among flows. The MANET nodes which are outside the transmission range are energy constraint and they consume more power for packet transmission. In this paper, we propose to develop a power adjustment algorithm to provide higher throughput and consume less power in the Mobile Ad hoc Networks. An optimal transmission power is calculated at the receiver based upon the data payload length and the interference amount. This power is given to the transmitter which increments or decrements the power with respect to the number of neighboring nodes. The adjusted power is retransmitted to the receiver so that the power level can be adjusted between the transmitter and receiver. Since the optimal transmission power is determined based upon the interference amount the possibility of collision among the nodes is reduced effectively. From our simulation results, we show that this algorithm provides higher throughput and lower energy consumption in ad hoc networks.