Focused on the issue that the time-varying characteristic of indoor Received Signal Strength Indicator (RSSI) drastically degrades the localization accuracy, an indoor matching localization algorithm based on two-dimensional grid characteristic parameter fusion was proposed. The algorithm fused received signal strength and Time Difference of Arrival (TDOA) parameters to build grid feature model, in which two-dimensional grid quick search strategy was adopted to reduce computation amount. Normalized Euclidean distance of grid feature vector was used to realize the optimal grid match localization. Finally, the precise terminal location was computed by reference nodes of the matched grid. In the localization simulation experiments, the proposed algorithm achieved the localization Root Mean Square Error (RMSE) at 1.079m, and the average localization accuracy was within 1.865m in the condition of 3m grid granularity; The probability of 3m localization accuracy reached 94.7%, which was 19.6% higher than that of traditional method only bawsed on RSSI. The proposed algorithm can effectively improve the indoor positioning accuracy, meanwhile reduces the search data quantity and the computational complexity of matching localization.