Abstract: In order to improve the performance and cost saving of indoor location system, a novel three dimensional indoor location algorithm based on multilateral measurement is proposed by using active radio frequency identification (RFID) in this paper. By using a single reader connected with four antennas to time-divisionly transmit/receive label signals, the distances of the tag to the different antennas are measured by the received signal strength indicators (RSSI). Then the unknown tag positions are located by the measured distances. In order to further improve the precision of location, the antenna arrangement scheme in the space of 10 meters×10 meters×10 meters is also studied. Simulation results show that 4 antennae are taken to fix unknown tags, calculating the initial position first with multilateral positioning method, and then solving label coordinate with iteration method, and locating the label 3 times, the average is taken as the final result that is the good positioning effect.It is also shown by simulations that the larger volumes of the tetrahedrons composed of the four antennas will result in the smaller errors of the three-dimensional positioning.