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Indoor positioning is an enabling technology for delivery of location-based services in mobile computing environments. This paper proposes a positioning solution using received signal strength in indoor wireless local area networks. In this application, an explicit measurement equation and the corresponding noise statistics are unknown because of the complexity of the indoor propagation channel. To address these challenges, we introduce a new state-space Bayesian filter: the nonparametric information (NI) filter. This filter effectively tracks motion in situations where the Kalman filter and its variants are inapplicable, while maintaining a computational complexity comparable to that of the Kalman filter. To deal with the noisy nature of the indoor propagation environment, the NI filter is used in the design of an intelligent dynamic WLAN tracking system. The system anticipates future position values and adapts its sensing and estimation parameters accordingly. Our experimental results conducted on measurements from a real office environment indicate that the combination of the intelligent design and the NI filter results in significant improvements over the Kalman and particle filters.