The technology of Radio Frequency Identification is becoming widely used in industry engineering. However, the UHF RFID tag can be easily affected by environmental noise factors, especially on the metal surface. The metal effect to Radio Frequency Identification (RFID) location system is described in this paper. Different methods are adopted to analyze the circumstances when RFID location system is placing near the metal objects. Simulation for tag antenna is accomplished to detect how the metal plate affecting the magnetic field around the tag. Moreover, the experiments are completed by using RF Code M250 reader and R150 tags. The proposed results illustrate the noise factor of metal material influence RFID system and provide the useful alert when RFID technology is applied in the metal environment of industry engineering.