In this paper, we analyze the location error of time of arrival (ToA)-based lightning location systems (LLSs) caused by propagation effects over mountainous terrain around the Santis tower located in the Swiss Alps. The study is based on a full-wave three-dimensional (3-D) finite difference time domain approach using the topographic map including the Santis tower and the nearby sensors belonging to LLSs. It is found that the vertical electric fields are strongly affected by the presence of the mountainous terrain and the finite ground conductivity and that the location error associated with the ToA technique depends strongly on the used onset time estimation technique. The evaluated location errors associated with amplitude thresholds of 10% and 20% and the time of the linear extrapolation of the tangent at maximum field derivative are found to be smallest (about 300 m or less). Finally, we assess the accuracy of two simplified methods (terrain envelope method and tight-terrain-fit method) to account for the location error due to propagation over mountainous terrain. These two methods might represent an efficient alternative to estimate the additional time delay due to propagation over a nonflat terrain by using available topographic data. In addition, a possible real-time location error compensation algorithm using the elongated propagation path method to improve the location error of the LLSs in mountainous regions is presented and discussed.