BeiDou satellites concentrates near the equator, which results in a low positioning accuracy within the homeland in north-south direction. Because the visible satellites are positive elevation, the vertical positioning accuracy is also low. To solve the above problems, a method to improve BeiDou satellites positioning accuracy was proposed, which uses pseudolites to improve the user observation geometry. The least square positioning algorithm based on the combination of pseudolites and satellites was derived. Dilution of positioning in north-south and vertical direction were also proposed to evaluate the positioning precision. Simulation results show that the dilution of positioning in north-south and vertical direction can be reduced effectively by lying pseudolites in the north area of users, thus the positioning accuracy can be effectively improved.