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Localization is a fundamental and essential issue for wireless sensor networks (WSNs). Existing localization algorithms can be categorized as either range-based or range-free schemes. Range-based schemes are not suitable for WSNs because of their irregularity of radio propagation and their cost of additional devices. In contrast, range-free schemes do not need to use received signal strength to estimate distances and only need simple and cheap hardware, and are thus more suitable for WSNs. However, existing range-free schemes are too costly and not accurate enough or are not scalable. To improve previous work, we present a fully distributed range-free localization scheme for WSNs. We assume that only a few sensor nodes, called anchors, know their locations, and the remaining (normal) nodes need to estimate their own locations by gathering nearby neighboring information. We propose an improved grid-scan algorithm to find the estimated locations of the normal nodes. Furthermore, we derive a vector-based refinement scheme to improve the accuracy of the estimated locations. Analysis, simulation, and experiment results show that our scheme outperforms the other range-free schemes even when the communication radius is irregular.