A two-way signal positioning method and a two-way signal positioning system thereof are disclosed. The method includes the following steps: controlling a locating device to be measured to transmit a plurality of positioning signals of a plurality of transmission powers; causing a plurality of known locating devices to receive the plurality of positioning signals and return a plurality of response signals to the locating device to be measured; recording the strengths of the plurality of positioning signals, the strengths of the plurality of response signals, the plurality of corresponding receiving times and the coordinates of the plurality of known locating devices to a database; identifying the known locating devices corresponding to the stronger signals; and obtaining a signal strength-distance function and a signal strength-distance standard deviation function from the database so as to identify the device location of the locating device to be measured.