Abstract: Aiming at the problem of difficulty in obtaining location information for indoor nodes, the distributed self-organizing diffusion and accuracy compensation algorithms were studied. This algorithm realizes the distributed self-organizing diffusion of location information from outdoor anchor nodes to indoor nodes to be located based on the integrated indoor and outdoor positioning of time difference of arrival (TDOA), and is further proposed based on multi-dimensional scaling (MDS) method to address the issue of error diffusion, while the regional positioning enhancement method resolves the problem of overly concentrated anchor node distribution, effectively improving positioning accuracy. The simulation results show that this method achieves precise positioning of indoor nodes on the basis of low cost and portable equipment.