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Location-aware wireless sensor networks will enable a new class of applications, and accurate range estimation is critical for this task. Low-cost location determination capability is studied almost entirely using radio frequency received signal strength (RSS) measurements, resulting in poor accuracy. More accurate systems use wide bandwidths and/or complex time-synchronized infrastructure. Low-cost, accurate ranging has proven difficult because small timing errors result in large range errors. This paper addresses estimation of the distance between wireless nodes using a two-way ranging technique that approaches the Cramér-Rao Bound on ranging accuracy in white noise and achieves 1-3 m accuracy in real-world ranging and localization experiments. This work provides an alternative to inaccurate RSS and complex, wide-bandwidth methods. Measured results using a prototype wireless system confirm performance in the real world.