With the rapid development of wireless communication technology, indoor positioning technology based on wireless sensor networks is widely used in daily life. However, indoor environment is easily disturbed by obstacles, which causes reflection and scattering during signal transmission, resulting in energy loss and lower ranging accuracy. In order to improve the accuracy of received signal strength indication (RSSI), this paper analyzes the relationship between distance and RSSI through experiments, selects the best communication distance as 4m, applies it to the propagation model, and proposes a dynamic path loss parameter ranging method, finds out the best neighborhood where the node to be measured is located, calculates the path loss parameter n by using the regional centroid, and obtains the position coordinates of the node to be measured by using trilateration positioning algorithm. Experiments show that compared with the fixed path loss parameter location method, the positioning accuracy of the dynamic path loss parameter location method is improved by 56%, and the ranging error is greatly reduced.