A system and method for wireless location estimation of a mobile node using radio transceivers with polarization diversity have been disclosed. The system includes a plurality of pre-defined fixed reference nodes distributed over a predetermined area adapted to transmit fixed reference signals. The system further includes mobile node transmission module at the mobile node adapted to transmit mobile reference signals with respect the mobile node and plurality of pre-defined fixed reference nodes. The horizontal polarization module and vertical polarization module polarize the transmitted mobile reference signals and the strength of the signals is measured. The derivation module derives the range of the signals. Subsequently, a profile of the derived range with reference to the measured signal strength is created by the system. The system further employs a trilateration algorithm to determine localization of the node using the created profile, thereby providing the location estimation for the mobile node.