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This work presents the problem of target tracking and relay localization in wireless sensor networks (WSN) based on quantized proximity sensors. Thus, we use the quantized variational filtering (QVF) in order to estimate jointly the target position and the relay location. Recently, variational filtering has been proved to be suitable to the communication constraints of WSN. However, this problem has been proposed only for binary sensor networks neglecting the information relevance of sensor measurements and the transmission energy consumption. At each sampling instant, the adaptive scheme provides the estimates of the target position and the relay location by using the QVF algorithm. The efficiency of the proposed method is validated by simulation results in target tracking for wireless sensor networks.