In this paper, we describe an accurate method for localization of a mobile robot using bluetooth. We introduce novel approaches for obtaining distance estimates and trilateration that overcome the hitherto known limitations of using Bluetooth for localization. Our approach is reliable and has the potential of being scaled to multi-agent scenarios. The proposed approach was tested on a mobile robot, and we present the experimental results. The error obtained was 0.427 ± 0.229 m, which proves the accuracy of our method.