Automated sensor-based monitoring of cows has become an important tool in herd management to improve or maintain animal health and welfare. Location systems offer the ability to locate animals within the barn for, for example, artificial insemination. Furthermore, they have the potential to measure the time cows spend in important areas of the barn, which might indicate need for improvement in the management of the herd or individuals. In this study, we tested the sensor-based real-time location system (RTLS) Smartbow (SB, Smartbow GmbH) under field conditions. The objectives of this study were (1) to determine the accuracy of the system to predict the location of the cow and the agreement between visual observations and RTLS observations for the total time spent by cows in relevant areas of the barn and (2) to compare the performance of 2 different algorithms (Alg1 and Alg2) for cow location. The study was conducted on a commercial Austrian dairy farm. In total, 35 lactating cows were video recorded for 3 consecutive days. From these recordings, approximately 1 h was selected randomly each day for every cow (3 d × 35 cows). Simultaneously, location data were collected and classified by the RTLS system as dedicated to the alley, feed bunk, or cubicle on a 1-min resolution. A total of 6,030 paired observations were derived from visual observations (VO) and the RTLS and used for the final data analysis. Substantial agreement of categorical data between VO and SB was obtained by Cohen's kappa for both algorithms (Alg1 = 0.76 and Alg2 = 0.78). Similar results were achieved by both algorithms throughout the study, with a slight improvement for Alg2. The ability of the system to locate the cows in the predefined areas was assessed, and the results from Alg2 showed sensitivity, specificity, and positive predictive value of alley (74.0, 91.2, and 76.9%), feed bunk (93.5, 86.2, and 89.1%), and cubicle (90.5, 83.3, and 95.4%) and an overall accuracy of 87.6%.The correlation coefficient (r) between VO and SB for the total time cows spent (within 1 h) in the predefined areas was good to strong (r = 0.82, 0.98, and 0.92 for alley, feed bunk, and cubicle, respectively). These results show the potential of the system to automatically assess total time spent by cows in important areas of the barn for indoor settings. Future studies should focus on evaluating 24-h periods to assess time budgets and to combine technologies such as accelerometers and location systems to improve the performance of behavior prediction in dairy cows.