This study mainly uses the concept of the Internet of Things (IoT) to establish a smart house with an indoor, comfortable, environmental, and real-time monitoring system. In the smart house, this investigation employed the temperature-and humidity-sensing module and the lightness module to monitor any condition for an intelligent-living house. The data of temperature, humidity, and lightness are transmitted wirelessly to the human-machine interface. The correlation of the weight of the extension theory is used to analyze the ideal and comfortable environment so that people in the indoor environment can feel better thermal comfort and lightness. In this study, improved particle swarm optimization (IPSO) is employed-an effective evolutionary method used to search the function extreme. It is simple and has a fast convergence. The convergence accuracy of this algorithm is not high at the beginning, and it can easily fall into the local extreme points. The effect of the inertia weight in mix extension theory and PSO becomes IPSO-Extension Neural Network (ENN), which was analyzed and found reliable. Motivated by the idea of power function, a new non-linear strategy for decreasing inertia weight (DIW) was proposed based on the existing linear DIW. Then, a novel hierarchical multi-sensor data fusion algorithm adopting this strategy was presented, and the weight factor of the data fusion was estimated. The distinctive feature of this algorithm is its capability of fusing data in a near-optimal manner when there is no available information about the reliability of the information sources, the degree of redundancy/complementarities of the information sources, and the structure of the hierarchy. It obtained effective information from the fusion data, successfully removed the noise disturbance, and achieved favorable results.