The invention relates to a low cost indoor positioning method. The low cost indoor positioning method includes the steps: setting one or more infrared beacons at the roof indoors; taking the projective point of one infrared beacon on the ground as the origin of coordinates, establishing an indoor coordinate system, and at the same time according to the indoor coordinate system, calibrating the coordinate information of other infrared beacons; during the positioning process of a positioned terminal, initializing a positioning sensor on the positioned terminal; tracking the positioned terminal through a camera which is set through the positioned terminal, aiming at the infrared beacons on the roof, and identifying, acquiring and recording the serial number information of the infrared beacons; at the same time, reading the positioning angle value through the positioning sensor of the positioned terminal; and at last, through the obtained serial number information of the infrared beacons, the positioning angle value read by the positioning sensor and the spatial relationship between the positioned terminal and the infrared beacons, calculating the positional coordinates of the positioned terminal. The low cost indoor positioning method is not influenced by electromagnetic induction or electromagnetic interference and barriers or buildings, and has the advantages of high positioning accuracy, simple algorithm and low application cost.