Location-based services (LBS) have long been recognized as a significant component of the emerging information services. However, the localization cost and the performance of algorithm still need to be optimized. In the study, an improved particle swarm optimization algorithm based on a feed-forward neural network (IMPSO-FNN) combined with RFID sensors is proposed, which can achieve the best indoor positioning location and overcome the problems effectively. In IMPSO-FNN, an improved PSO algorithm (IMPSO) is developed to determine the optimal connecting weights and markedly optimize the network parameters and structural parameters for the FNN, and then an optimal location prediction model is established by the IMPSO-FNN. To avoid the interference of environmental noise for the experimental data, some preprocessing methods are used during the positioning process. The computational results for learning two continuous functions show that the proposed positioning algorithm has a faster convergence rate and higher generalization performance. The model evaluation results also verify that the proposed positioning method really is superior to other algorithms in terms of the learning ability, efficiency, and positioning accuracy.