An indoor positioning system (IPS) is a network of devices used to locate people or objects where GPS and other satellite technologies lack precision or fail entirely, such as inside multistory buildings, airports, alleys, parking garages, and underground locations.

A large variety of techniques and devices are used to provide indoor positioning ranging from reconfigured devices already deployed such as smartphones, Wi-Fi and Bluetooth antennas, digital cameras, and clocks; to purpose built installations with relays and beacons strategically placed throughout a defined space. Lights, radio waves, magnetic fields, acoustic signals, and behavioral analytics are all used in IPS networks. IPS can achieve position accuracy of 2 cm, which is on par with RTK enabled GNSS receivers that can achieve 2 cm accuracy outdoors. IPS use different technologies, including distance measurement to nearby anchor nodes (nodes with known fixed positions, e.g. Wi-Fi / Li-Fi access points, Bluetooth beacons or Ultra-Wideband beacons), magnetic positioning, dead reckoning. They either actively locate mobile devices and tags or provide ambient location or environmental context for devices to get sensed. The localized nature of an IPS has resulted in design fragmentation, with systems making use of various optical, radio, or even acoustic technologies.

IPS has broad applications in commercial, military, retail, and inventory tracking industries. There are several commercial systems on the market, but no standards for an IPS system. Instead each installation is tailored to spatial dimensions, building materials, accuracy needs, and budget constraints.

For smoothing to compensate for stochastic (unpredictable) errors there must be a sound method for reducing the error budget significantly. The system might include information from other systems to cope for physical ambiguity and to enable error compensation. Detecting the device's orientation (often referred to as the compass direction in order to disambiguate it from smartphone vertical orientation) can be achieved either by detecting landmarks inside images taken in real time, or by using trilateration with beacons. There also exist technologies for detecting magnetometric information inside buildings or locations with steel structures or in iron ore mines.

Due to the signal attenuation caused by construction materials, the satellite based Global Positioning System (GPS) loses significant power indoors affecting the required coverage for receivers by at least four satellites. In addition, the multiple reflections at surfaces cause multi-path propagation serving for uncontrollable errors. These very same effects are degrading all known solutions for indoor locating which uses electromagnetic waves from indoor transmitters to indoor receivers. A bundle of physical and mathematical methods are applied to compensate for these problems. Promising direction radio frequency positioning error correction opened by the use of alternative sources of navigational information, such as inertial measurement unit (IMU), monocular camera Simultaneous localization and mapping (SLAM) and Wi-Fi SLAM. Integration of data from various navigation systems with different physical principles can increase the accuracy and robustness of the overall solution.

The U.S. Global Positioning System (GPS) and other similar global navigation satellite systems (GNSS) are generally not suitable to establish indoor locations, since microwaves will be attenuated and scattered by roofs, walls and other objects. However, in order to make the positioning signals become ubiquitous, integration between GPS and indoor positioning can be made.

Currently, GNSS receivers are becoming more and more sensitive due to increasing microchip processing power. High sensitivity GNSS receivers are able to receive satellite signals in most indoor environments and attempts to determine the 3D position indoors have been successful. Besides increasing the sensitivity of the receivers, the technique of A-GPS is used, where the almanac and other information are transferred through a mobile phone.

However, despite the fact that proper coverage for the required four satellites to locate a receiver is not achieved with all current designs (2008–11) for indoor operations, GPS emulation has been deployed successfully in Stockholm metro. GPS coverage extension solutions have been able to provide zone-based positioning indoors, accessible with standard GPS chipsets like the ones used in smartphones.