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GSM-based positioning technology is more suitable for navigation than GPS in urban, indoor and even underground areas. However, it cannot be used for automotive navigation due to its large positioning error (more than 100 m). This paper presents an approach utilizing fractal analysis and wavelet transform to enhance GSM-based positioning accuracy. Fractal theory and analysis is introduced into the research of GSM downlink multipath fading. The GSM base station signal strength data are converted into representations in terms of wavelet bases. The approach performs real-time signal strength processing. Based on strength data of the signals from different base stations, the distances between the receiver and stations are estimated and then the position estimation of the receiver can be applied. The position accuracy can be improved.