With the convergence of internet and wireless communications, a plethora of new services will originate. A natural application for cellular radio networks is that of radiolocation, in which the mobile unit can be positioned based on the signals received at several base stations. In this paper, we derive the Cramer-Rao bound (CRB), which serves as an optimality criterion, for the estimation of channel parameters and source localization in time division multiple access (TDMA) mobile radio systems operating over multipath fading channels. The CRB for the mobile’s position that we obtain do not assume any particular trilateration method, and is expressed as a function of the line-of-sight (LOS) signal parameters that are estimated at one or more base station (BS) equipped of cluster of antennas with arbitrary directional characteristics. As an application example, we study the achievable positioning accuracy and the effects of local scattering for a typical global system for mobile communications (GSM) digital cellular system.