The differential ultra-wideband indoor positioning method provides differential positioning to increase the accuracy of ultra-wideband (UWB) based indoor position estimation. Knowledge about common errors can be learned by employment of a reference source, where the difference between its known and estimated position (differential operation in solution domain), or the difference between the known and measured ranges (differential operation in measurement domain), provides invaluable information to be utilized in reducing errors in estimating the position of the target source. Differential operation accuracy reaches far beyond the accuracy of the non-differential setting.