Abstract: In the indoor pseudolite positioning system, the effects of the near-far problem always lead to the losing lock in tracking loop. To reduce the effects of the near-far problem, an effective algorithm, vector tracking loop(VTL) algorithm was proposed in this paper. The structure of the VTL was analyzed. The linear model of the system and the operation of that were shown. In the VTL, positioning errors were considered as statements, the pseudorange errors and pseudorange-rate errors were regarded as measurements. Combined with the updated positioning results, a stable tracking control input could be obtained. A simulation result was made to compare the tracking ability of the blocked signals among the scalar tracking loop (STL) and VTL. Furthermore, an independent indoor pseudolite positioning system was set up. From the experiments, the VTL system could dramatically reduce the effects of the near-far problem for STL.