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This paper presents a novel indoor localization system using a self-built ultrasonic transmitter and a receiver. In comparison to commercial localization systems, our ultrasonic system is more robust against multipath propagation at indoor conditions and provides accurate time difference of arrival measurements. Besides, by improving the coverage of our ultrasonic system, the number of system components is significantly reduced. The actual position of the target is then determined by interacting multiple model estimator, which offers protection against the measurement noise at both line-of-sight and non-line-of-sight conditions through simultaneous running of extended Kalman filter and robust extended Kalman filter. The experimental results shows that our system is able to deliver the localization solution with higher accuracy compared to commercially available options.