At present, more and more applications require the indoor positioning information of objects, making the indoor positioning technology become one of the hotspots. In this paper, LANDMARC algorithm and VIRE algorithm are analysed, which allow the technology of Radio Frequency Identiflcation (RFID) to be applied in indoor positioning. On this basis, the improvement is made and RFID indoor positioning method based on virtual reference tags and Bayesian estimation is proposed. Experimental results indicate that the improved algorithm has further improved than LANDMARC algorithm and VIRE algorithm in terms of positioning accuracy.