For the accuracy of indoor location system based on the strength of received signal being restricted by the multipath effect and non line of sight propagation,a location algorithm using radio frequency identification was proposed which was suitable for 915 MHZ UHF signal. Dual frequency subcarriers were introduced to overcome the ambiguity of whole cycles and reduce the demands of sample rate. On the basis of spectrum analysis of All-Phase FFT, a mechanism was put forward to estimate the phase difference so as to achieve the ranging information with under-sampling, and then the position of the tracking tags could be obtained by the least square method. Simulation results show that, the proposed algorithm possesses a higher accuracy and stability.