The ranging measurement based on TOA (time of arrival) is susceptible to multipath interference which will lead to a lager system error and make the indoor position accuracy worse. To solve these problems, this paper firstly analyzes the generation and characteristics of systematic error in TOA location, then proposed a positioning algorithm based on particle swarm optimization. This algorithm establishes the solution domain by using the space constraint relationship between the ranging value and the solution location, and then uses particle swarm algorithm to solve the problem, and through the establishment of the system error on the penalty function and fitness function to achieve error correction to reduce the particle search space and speed up the algorithm convergence rate. Experimental results show that the proposed method can effectively restrain the system error caused by ranging in the indoor location, and the localization accuracy can be improved obviously.