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Based on multiple unmanned aerial vehicles (UAVs) flight at a constant altitude, a fault-tolerant cooperative localization algorithm against global positioning system (GPS) signal loss due to GPS receiver malfunction is proposed. Contrast to the traditional means with single UAV, the proposed method is based on the use of inter-UAV relative range measurements against GPS signal loss and more suitable for the small-size and low-cost UAV applications. Firstly, for re-localizing an UAV with a malfunction in its GPS PS receiver, an algorithm which makes use of any other three healthy UAVs in the cooperative flight as the reference points for re-localization is proposed. Secondly, by using the relative ranges from the faulty UAV to the other three UAVs, its horizontal location can be determined after the GPS signal is lost. In order to improve an accuracy of the localization, a Kalman filter is further exploited to provide the estimated location of the UAV with the GPS PS signal loss. The Kalman filter calculates the variance of observations in terms of horizontal dilution of positioning (HDOP) automatically. Then, during each discrete computing time step, the best reference points are selected adaptively by minimizing the HDOP. Finally, two simulation examples in Matlab/Simulink environment with five UAVs in cooperative flight are shown to evaluate the effectiveness of the proposed method.