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In this paper, we propose a dynamic channel assignment method that utilizes location information of mobile terminals to calculate the optimal channel scheme in indoor WLAN positioning systems. Our method could achieve two goals: (a) the optimal channel scheme can guarantee a maximum throughput of overall wireless network. (b) terminals can communicate and be located simultaneously in our system. By taking advantage of positioning system, we can know the location of terminals, and such location information can be used to optimize network capacity through assigning appropriate channels. Assigning different channel to neighbouring APs is not only for optimizing network capacity, but also for improving the positioning accuracy due to that it can immigrate the interference among APs and receive accurate signal strength. To confirm its effectiveness, we evaluate our approach by simulation. We compare our method with the single, random, and static methods and the LCCS method. The results illustrate that the throughput of our channel assignment method is higher than other methods.