This project proposes an active RFID-based indoor positioning system (IPS) for an industrial environment. The system is quite similar to Global positioning system (GPS). However, GPS can only work if the device is discovered by satellite. This work is to overcome the weakness of GPS capability for tracking an object that did not receive a satellite signal. The methods, technique and technology of tracking system have also been proposed. However, the work mostly focuses on Time of Arrival (ToA) and Received Signal Strength Indicator (RSSI) technique. Each technique has their own deficiency. Several step is done such as relate both methods to overcome that deficiency. Ultra-High Frequency (UHF) RFID are used in this development of IPS.