Due to the ease of development and inexpensiveness, indoor localization systems are getting a significant attention but, with recent advancement in context and location aware technologies, the solutions for indoor tracking and localization had become more critical. Ranging methods play a basic role in the localization system, in which received signal strength indicator-(RSSI-) based ranging technique gets the most attraction. To predict the position of an unknown node, RSSI measurement is an easy and reliable method for distance estimation. In indoor environments, the accuracy of the RSSI-based localization method is affected by strong variation, specially often containing substantial amounts of metal and other such reflective materials that affect the propagation of radio-frequency signals in nontrivial ways, causing multipath effects, dead spots, noise, and interference. This paper proposes an adaptive smoother based location and tracking algorithm for indoor positioning by making fusion of RSSI and link quality indicator (LQI), which is particularly well suited to support context aware computing. The experimental results showed that the proposed mathematical method can reduce the average error around 25%, and it is always better than the other existing interference avoidance algorithms.