Wireless capsule endoscopy (WCE) is a well-established diagnostic tool for visualizing the gastrointestinal (GI) tract. Early diagnosis helps doctors to act beforehand and treat the disease on its earlier stages. Images taken by WCE do not provide location information. However, these data are useful for selecting proper treatment. In this article, we have introduced a hybrid method called MagnetOFuse to localize the capsule inside the human GI track. The capsule is equipped with four side wall cameras and a magnet. Magnetic localization acquires the capsule’s global position using nine three-axis Hall effect sensors. However, magnetic localization alone cannot distinguish between the capsule’s motion and the GI tract’s motion. To overcome this issue and increase the tracking accuracy, low-resolution monochromatic cameras are installed along the capsule’s side, which are responsible for measuring the capsule’s movement, not the involuntary motion of the GI system. A complete setup is designed to test the capsule and to perform the experiments. The results show that the proposed hybrid method has an average position error of only 3.5 mm and can compensate for the GI tract’s relative movements. Furthermore, environment parameters, such as magnetic interference and the nonhomogeneous structure of the GI tract, have little influence on our system compared to the available magnetic localization methods.