Increasing sources of sensor measurements and prior knowledge have become available for indoor localization on smartphones. How to effectively utilize these sources for enhancing localization accuracy is an important yet challenging problem. In this paper, we present an area state-aided localization algorithm that exploits various sources of information. Specifically, we introduce the concept of area state to indicate the area where the user is on an indoor map. The position of the user is then estimated using inertial measurement unit (IMU) measurements with the aid of area states. The area states are in turn updated based on the position estimates. To avoid accumulated errors of IMU measurements, our algorithm uses WiFi received signal strength indicator (RSSI) to indicate the vicinity of the user to the routers. The experiment results show that our system can achieve satisfactory localization accuracy in a typical indoor environment.