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According to the application of range-free localization technology for wireless sensor networks (WSNs), an improved localization algorithm based on iterative centroid estimation is proposed in this paper. With this methodology, the centroid coordinate of the space enclosed by connected anchor nodes and the received signal strength indication (RSSI) between the unknown node and the centroid are calculated. Then, the centroid is used as a virtual anchor node. It is proven that there is at least one connected anchor node whose distance from the unknown node must be farther than the virtual anchor node. Hence, in order to reduce the space enclosed by connected anchor nodes and improve the location precision, the anchor node with the weakest RSSI is replaced by this virtual anchor node. By applying this procedure repeatedly, the localization algorithm can achieve a good accuracy. Observing from the simulation results, the proposed algorithm has strong robustness and can achieve an ideal performance of localization precision and coverage. [ABSTRACT FROM AUTHOR]