Wearable indoor localization can now find applications in a wide spectrum of fields, including the care of children and the elderly, sports motion analysis, rehabilitation medicine, robotics navigation, etc. Conventional inertial measurement unit (IMU)-based position estimation and radio signal indoor localization methods based on WiFi, Bluetooth, ultra-wide band (UWB), and radio frequency identification (RFID) all have their limitations regarding cost, accuracy, or usability, and a combination of the techniques has been considered a promising way to improve the accuracy. This investigation aims to provide a cost-effective wearable sensing solution with data fusion algorithms for indoor localization and real-time motion analysis. The main contributions of this investigation are: (1) the design of a wireless, battery-powered, and light-weight wearable sensing device integrating a low-cost UWB module-DWM1000 and micro-electromechanical system (MEMS) IMU-MPU9250 for synchronized measurement; (2) the implementation of a Mahony complementary filter for noise cancellation and attitude calculation, and quaternions for frame rotation to obtain the continuous attitude for displacement estimation; (3) the development of a data fusion model integrating the IMU and UWB data to enhance the measurement accuracy using Kalman-filter-based time-domain iterative compensations; and (4) evaluation of the developed sensor module by comparing it with UWB- and IMU-only solutions. The test results demonstrate that the average error of the integrated module reached 7.58 cm for an arbitrary walking path, which outperformed the IMU- and UWB-only localization solutions. The module could recognize lateral roll rotations during normal walking, which could be potentially used for abnormal gait recognition.