This article presents a wearable system that localizes people in the indoor environment, using data from inertial sensors. The sensors measure the parameters of human motion, tracking the movements of the torso and foot. For this purpose, they were integrated with shirt and the shoe insole. The values of acceleration measured by the sensors are sent via Bluetooth to a smartphone. The localization algorithm implemented on the smartphone, presented here, merges data from the shirt and the shoe to track the steps made by the user and filter out the localization errors caused by movements the shirt and torso. The experimental verification of the algorithm is also presented.