A method of operating a radio frequency identification (RFID) system is provided. The method interrogates RFID tags with an RFID reader and provides at least some of the collected tag data to a mobile device that is unable to communicate with RFID tags using the over-the-air interface. In some situations, the RFID system obtains the current location of the mobile device and determines the location of a target tag relative to the current location of the mobile device. Locating the target tag in this manner involves the interrogation of a reference tag located at the mobile device, along with the target tag, using one RFID reader. The position of the target tag relative to the reference tag is calculated in response to the tag response signals obtained from the target and reference tags. Moreover, location of the target tag can be independently determined relative to the location of a mobile reader, by using a reference tag attached to a fixed reader or to the mobile reader.