SummaryIn this work, we propose a highly efficient binary tree‐based anti‐collision algorithm for radio frequency identification (RFID) tag identification. The proposed binary splitting modified dynamic tree (BS‐MDT) algorithm employs a binary splitting tree to achieve accurate tag estimation and a modified dynamic tree algorithm for rapid tag identification. We mathematically evaluate the performance of the BS‐MDT algorithm in terms of the system efficiency and the time system efficiency based on the ISO/IEC 18000‐6 Type B standard. The derived mathematical model is validated using computer simulations. Numerical results show that the proposed BS‐MDT algorithm can provide the system efficiency of 46% and time system efficiency of 74%, outperforming all other well‐performed algorithms.