Mobile Ad-hoc NETwork (MANET) is a decentralized type of wireless network. The network is ad hoc because it does not rely on a pre-existing infrastructure, such as routers in wired networks or access points in managed wireless networks. One of the major issue and challenging area in MANET is the process of routing due to dynamic topologies and high mobility of mobile nodes. The efficiency and accuracy of a protocol depend on many parameters in these networks. In addition to other parameters node velocity and propagation models are among them. Calculating signal strength at the receiver is the responsibility of a propagation model while the mobility of nodes is responsible for the topology of the network. A huge amount of loss in performance is occurred due to the variation of signal strength at the receiver while increasing and decreasing the distance of nodes. In this paper, a novel approach is identified and portrayed of the said propagation models based on distance from each other. It has been analyzed to check distance based performance evaluation of Two Ray Ground and Free Space Radio Wave Propagation Models on the performance of Ad-hoc On-demand Distance Vector (AODV) Routing Protocol in MANET. The simulation has been carried out in (Network Simulator-2) NS-2 by using performance metrics that are Average Throughput (kpbs), Average Latency (milliseconds) and Average Packet Drop (packets). The results predicted that propagation models and mobility have a strong influence on the performance of AODV in considered distance based scenario.