With the development of the mobile Internet, the demand for indoor location based services(ILBS) is increasing. Applications and devices in indoor environments can determine their position based on Received Signal Strength Indication(RSSI) of bluetooth Beacons. However, because of multipath effects, shadow fading and the blockage of obstacles, RSSI values are unstable for positioning. The propagation model are various in different environments, which have caused great difficulty in high-precision indoor positioning. In this paper, a novel positioning algorithm based on cellular network and bluetooth Beacon's RSSI is proposed for ILBS. The whole algorithm is divided into two parts: Offline Preparation and Online Positioning. During Offline Preparation, Beacon node is cellular networked in regular quadrilateral; a universal ranging model is derived from traditional ranging model for high-precision positioning. During Online Positioning, missing RSSI values are replaced firstly; next, Outliers Removed Median-Kalman Filter is used to process RSSI, which makes the signal smoother to range; then, the cell in which the mobile terminal is located is determined according to the strongest four RSSI values; after that, using filtered RSSI, distances without height influence could be calculated; finally, Weighted Multi-Point Positioning Algorithm With Cellular Network Assistance is used to calculate the real-time location of the mobile terminal. Experiment results show that our algorithm achieves average accuracy in 0.3m−0.5m and limits the maximum error within 0.8 m. INDEX TERMS Bluetooth beacon, received signal strength indication, indoor positioning, cellular network, median-Kalman filter, ranging model.