We study the effect of interference on localization algorithms through the study of the interference effect on signal features that are used for localization. Particularly, the effect of interference on packet-based Received Signal Strength Indicator (RSSI), reported by IEEE 802.11 and IEEE 802.15.4 technologies, and on Time of Flight (ToF), reported by IEEE 802.15.4 technology, is studied using both theoretical discussions and experimental verifications. As for the RSSI values, using an information theoretic formulation, we distinguish three operational regimes and we show that the RSSI values, in dBm, remain unchanged in the noise-limited regime, increase almost linearly with interference power in dBm in the interference-limited regime and cannot be obtained due to packet loss in the collision regime. The maximum observable RSSI variation is dependent on the transmission rate and Signal to Noise Ratio (SNR). We also show that ToF is, interestingly, decreased under interference which is caused in the symbol synchronization procedure at the receiver. After providing the experimental results, we discuss how the localization algorithms are affected by interference.