This paper emphasizes on the sensor fusion algorithm on mobile robot's localization, to solve the problem of accumulated error attributed to wheel encoders and redundant readings in multi-sonar system. Based on the error analysis of wheel encoders and sonar, a new integrated intelligent sensor fusion algorithm is introduced, the novel core of such algorithm is error judgement rule. With this technique, the mobile robot can autonomously correct its position in proper time. As demonstration, an experiment on the Pioneer II mobile robot has been completed. Pioneer II is an intelligent mobile robotic platform manufactured by ActivMedia Corporation, it is equipped with an internal wheel encoders and a full-span sonar ring. The experiment result shows that such algorithm not only avoids the error accumulation with regard to wheel encoders, but also guarantees the motion speed of robot.