This paper proposes a scheme for bandwidth allocation in wireless ad hoc networks. The quality-of-service (QoS) levels for each end-to-end flow are expressed using a resource-utility function, and our algorithms aim to maximize aggregated utility. The shared channel is modeled as a bandwidth resource defined by maximal cliques of mutual interfering links. We propose a novel resource allocation algorithm that employs an auction mechanism in which flows are bidding for resources. The bids depend both on the flow's utility function and the intrinsically derived shadow prices. We then combine the admission control scheme with a utility-aware on-demand shortest path routing algorithm where shadow prices are used as a natural distance metric. As a baseline for evaluation, we show that the problem can be formulated as a linear programming (LP) problem. Thus, we can compare the performance of our distributed scheme to the centralized LP solution, registering results very close to the optimum. Next, we isolate the performance of price-based routing and show its advantages in hotspot scenarios, and also propose an asynchronous version that is more feasible for ad hoc environments. Further experimental evaluation compares our scheme with the state of the art derived from Kelly's utility maximization framework and shows that our approach exhibits superior performance for networks with increased mobility or less frequent allocations. © 2008 IEEE.