Location-based service (LBS) is becoming an important part of the information technology (IT) business. Localization is a core technology for LBS because LBS is based on the position of each device or user. In case of outdoor, GPS - which is used to determine the position of a moving user - is the dominant technology. As satellite signal cannot reach indoor, GPS cannot be used in indoor environment. Therefore, research and study about indoor localization technology, which has the same accuracy as an outdoor GPS, is needed for "seamless LBS". For indoor localization, we consider the IEEE802.11 WLAN environment. Generally, received signal strength indicator (RSSI) is used to obtain a specific position of the user under the WLAN environment. RSSI has a characteristic that is decreased over distance. To use RSSI at indoor localization, a mathematical model of RSSI, which reflects its characteristic, is used. However, this RSSI of the mathematical model is different from a real RSSI, which, in reality, has a sensitive parameter that is much affected by the propagation environment. This difference causes the occurrence of localization error. Thus, it is necessary to set a proper RSSI model in order to obtain an accurate localization result. We propose a method in which the parameters of the propagation environment are determined using only RSSI measurements obtained during localization.