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Capsule endoscopes have been proven useful to diagnose lesions along digestive tracts in recent years. However,the capsule moving through the GI tract can't be externally controlled, thus it may miss capturing important lesions. Locomotion is in urgent need for future in-vivo capsule endoscopy, and location is one of the most needed information to guide the movement of capsule inside the body. We present a novel method and implementation of a high resolution localization system based on UHF band RFID. It consists of an RFID reader with 3D antenna array, a tag inside the capsule, and a data processing module. We also propose a location estimation algorithm by calculating center of gravity of antennas which have detected the tag, and the results show good estimation accuracy. Furthermore, some RF parts of the system are simulated with agilent ADS and ADIsimPLL tools. We believe that the experience gained in the process of our design would serve as an important reference for the future in-vivo capsule endoscope.