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Ambient intelligence is a new information paradigm, where people are empowered through a digital environment that is “aware” of their presence and context and is sensitive, adaptive, and responsive to their needs. Hence, one of the important requirements for ambient intelligent environments (AIEs) is the ability to localize the whereabouts of the user in the AIE to address her/his needs. In order to protect user privacy, the use of cameras is not desirable in AIEs, and hence, there is a need to rely on nonintrusive sensors. There are various localization means that are available for outdoor spaces such as those which rely on satellite signals triangulation. However, these outdoor localization means cannot be used in indoor environments. The majority of nonintrusive and noncamera-based indoor localization systems require the installation of extra hardware such as ultrasound emitters/antennas, radio-frequency identification (RFID) antennas, etc. In this paper, we propose a novel indoor localization system that is based on WiFi signals which are free to receive, and they are available in abundance in the majority of domestic spaces. However, free WiFi signals are noisy and uncertain, and their strengths and availability are continuously changing. Hence, we present a fuzzy logic-based system which employs free available WiFi signals to localize a given user in AIEs. The proposed system receives WiFi signals from a large number of existing WiFi access points (up to 170 access points), where no prior knowledge of the access points locations and the environment is required. The system employs an incremental lifelong learning approach to adjust its behavior to the varying and changing WiFi signals to provide a zero-cost localization system which can provide high accuracy in real-world living spaces. We have compared our system in both simulated and real environments with other relevant techniques in the literature, and we have found that our system outperfo- ms the other systems in the offline learning process, whereas our system was the only system which is capable of performing online learning and adaptation. The proposed system was tested in real-world spaces from a living lab intelligent apartment (iSpace) to a town center apartment to a block of offices. In all these experiments, our system has been highly accurate in detecting the user in the given AIEs, and the system was able to adapt its behavior to changes in the AIE or the WiFi signals. We envisage that the proposed system will play an important role in AIEs, especially for privacy concerned situations like elderly care scenarios.