We describe a low-cost wearable system that tracks the location of individuals indoors using commonly available inertial navigation sensors fused with radio frequency identification (RFID) tags placed around the smart environment. While conventional pedestrian dead reckoning (PDR) calculated with an inertial measurement unit (IMU) is susceptible to sensor drift inaccuracies, the proposed wearable prototype fuses the drift-sensitive IMU with a RFID tag reader. Passive RFID tags placed throughout the smart-building then act as fiducial markers that update the physical locations of each user, thereby correcting positional errors and sensor inaccuracy. Experimental measurements taken for a 55 m × 20 m 2D floor space indicate an over 1200% improvement in average error rate of the proposed RFID-fused system over dead reckoning alone.