A smart RFID system is developed and tested able to select, discover and interact with objects, possibly hidden, distributed in harsh electromagnetic environments. This is accomplished by augmenting the RFID technology with direction finding capabilities of a monopulse radar operated at 2.45 GHz. Low-cost transceivers are exploited at both the tagged objects and the reader sides. The system is configured for the integration with smart domestic and industrial spaces allowing natural interaction with tagged objects by different users' categories and needs. An item is first selected and its characteristics are then available to be collected, modified and exchanged with a remotely located central unit. The same information are then used to drive subsequent detections and localizations of the same object. In both operating modes objects are successfully addressed by a smart reception of their far-field radiation properties. For this purpose a two-element antenna array connected to a rat-race coupler is designed and integrated with the sensors at the reader side .