This paper introduces a real-time localization system (RTLS) using efficient multiple propagation models to compensate for the drawback of the received signal strength technique. The RTLS is implemented on an active RFID system and uses received signal strength measurements and reference tags for ranging. The RTLS is implemented purely in software that post processes the received signal strength data from the reader and does not require any additional hardware or any modifications to the RFID reader or tags. The proposed algorithm using multiple propagation models improves the performance of the RTLS. Two-dimensional localization results are given for a four-reader system covering a 4.5 by 5.5 meter room. The scenarios of both single tag and two tags for the tag object are developed. It has been proven that tag multiplicity, two tags for the target object, improves the performance of the system by reducing inaccurate received signal strength measurements due to poor tag orientation. Experimental results show that the proposed system achieves a localization accuracy within 1 meter in over 50 percent of the experiments and outperforms other comparable systems. Currently developed three-dimensional space extension research is discussed and results are presented.