Geographic location of nodes is very useful in a sensor network. Previous localization algorithms assume that there exist some anchor nodes in this kind of network, and then other nodes are estimated to create their coordinates. Once there are not anchors to be deployed, those localization algorithms will be invalidated. Many papers in this field focus on anchor-based solutions. The use of anchors introduces many limitations, since anchors require external equipments such as global position system, cause additional power consumption. A novel positioning algorithm is proposed to use a virtual coordinate system based on a new concept-virtual anchor. It is executed in a distributed fashion according to the connectivity of a node and the measured distances to its neighbors. Both the adjacent member information and the ranging distance result are combined to generate the estimated position of a network, one of which is independently adopted for localization previously. At the position refinement stage the intermediate estimation of a node begins to be evaluated on its reliability for position mutation; thus the positioning optimization process of the whole network is avoided falling into a local optimal solution. Simulation results prove that the algorithm can resolve the distributed localization problem for anchor-free sensor networks, and is superior to previous methods in terms of its positioning capability under a variety of circumstances. Geographic location of nodes is very useful in a sensor network. Previous localization algorithms assume that there exist some anchor nodes in this kind of network, and then other nodes are estimated to create their coordinates. Once there are not anchors to be deployed, those localization The use of anchors introduces many limitations, since anchors require external kits such as global position system, cause additional power consumption. A novel positioning algorithm is proposed to use a virtual coordinate system based on a new concept-virtual anchor. It is executed in a distributed fashion according to the connectivity of a node and the measured distance to its neighbors. Both the adjacent member information and the ranging distance result are combined to generate the estimated position of a network, one of which is independently adopted for localization previously. At the position refin ement stage the intermediate estimation of a node begins to be evaluated on its reliability for position mutation; thus the positioning optimization process of the whole network is avoided falling into a local optimal solution. Simulation results prove that the algorithm can resolve the distributed localization problem for anchor-free sensor networks, and is superior to previous methods in terms of its positioning capability under a variety of circumstances.