SummaryThe primary concern for securing the Internet of Drones (IoD) is authentication. Drone location is a vital information that must be verified before a secure communication link with the ground station can be established. In this paper, a location aware mutual authentication technique for secure inter‐drone and drone to ground communication using physical unclonable functions and Chebyshev chaotic maps is proposed. This is the first work that addresses the location validation of drones along with server‐less inter‐drone communication with a fail‐safe mechanism designed using a fuzzy inference system to tackle drone failures. The security of the system is analyzed using Burrows–Abadi–Needham logic, real‐or‐random oracle model and ProVerif. The processing, communication, and storage costs of the proposed scheme are determined and compared to other drone mutual authentication protocols. The proposed mechanism outperforms the existing mutual authentication protocols with superior security features and performance attributes and is well suited for surveillance drone networks.