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A novel RSSI-based localization algorithm is proposed for wireless sensor networks. The proposed distributed range-free localization scheme is implemented by a mobile anchor node equipped with a GPS. The mobile anchor node moves in sensor area and broadcasts its current position periodically. A stationary sensor node computes its location using two positions of the mobile anchor node. After first round localization is done, the un-located sensor nodes can compute their locations with the help of localized stationary sensor nodes. Our localization algorithm is simulated in Opnet10.0. Simulation results show that our proposed localization scheme outperforms the other localization algorithms using mobile anchor nodes.