Growing convergence among mobile computing devices and embedded technology sparks the development and deployment of "context-aware" applications, where location is the most essential context. In this paper we present LANDMARC, a location sensing prototype system that uses Radio Frequency Identification (RFID) technology for locating objects inside buildings. The major advantage of LANDMARC is that it improves the overall accuracy of locating objects by utilizing the concept of reference tags. Based on experimental analysis, we demonstrate that active RFID is a viable and cost-effective candidate for indoor location sensing. Although RFID is not designed for indoor location sensing, we point out three major features that should be added to make RFID technologies competitive in this new and growing market.