Wireless Military Sensor Networks (WMSN), used in applications like security surveillance, battlefield security, and environmental monitoring, face unique challenges from insider threats due to potential node compromise, especially in hostile environments with limited resources and a large number of sensor nodes. A mutual authentication system was developed for energy-aware sensor nodes, utilizing cryptographic authentication based on event communications or packet types, along with defense against network layer attacks. Mutual security designs, featuring node-to-node and node-to-sink security, highlight the importance of end-to-end data security, as the confidentiality and authenticity of data are highly vulnerable to insider attacks, further exacerbated by multi-hop message transmission. In this paper, we enhance the mutual authentication system to address vulnerabilities to insider attacks by developing a location-aware mutual authentication framework that leverages the static and location-aware characteristics of WMSNs. Each node stores and exchanges digital signature keys tied to its precise location, with the location-aware keys effectively limiting the impact of attacked nodes to their neighboring region. The proposed location-aware mutual authentication framework ensures both node-to-sink and node-to-node authentication along report forwarding routes. The proposed location-aware strategy is resistant to DoS attacks and ensures effective enroute bogus data screening, with thorough analysis showing minimal protocol overhead and strong security against an increasing number of compromised nodes.