The conventional methods for indoor localization rely on technologies such as RADAR, ultrasonic, laser range localization, beacon technology, and others. Developers in the industry have started utilizing these localization techniques in iBeacon systems that use Bluetooth sensors to measure the object’s location. The iBeacon-based system is appealing due to its low cost, ease of setup, signaling, and maintenance; however, with current technology, it is challenging to achieve high accuracy in indoor object localization or tracking. Furthermore, iBeacons’ accuracy is unsatisfactory, and they are vulnerable to other radio signal interference and environmental noise. In order to address those challenges, our study focuses on the development of error modeling algorithms for signal calibration, uncertainty reduction, and interfered noise elimination. The new error modeling is developed on the Curve Fitted Kalman Filter (CFKF) algorithms. The reliability, accuracy, and feasibility of the CFKF algorithms are tested in the experiments. The results significantly show the improvement of the accuracy and precision with this novel approach for iBeacon localization.