Location awareness in an indoor environment and wireless access to Internet applications are major research areas towards the overwhelming success of wireless and mobile communications. However, the unpredictable indoor radio propagation and handover latency due to node mobility are the main challenging issues that need to be addressed. For tackling efficiently both problems of indoor localization and handover management, we propose combining key benefits of two outstanding wireless technologies, i.e. radio frequency identification (RFID) and a wireless local area network (WLAN) infrastructure. WLANs, such as IEEE 802.11 (WiFi), are now very common in many indoor environments for providing wireless communication among WiFi-enabled devices by accessing an Access Point (infrastructure mode) or through peer to peer connections (ad hoc mode). However, the small cell size of the Access Points (APs) in a WiFi-based network drives the need for frequent handovers leading to increased latency. RFID is an emerging technology consisting of two basic components, a tag and a reader, and its main purpose is the automatic identification of tagged objects by a reader. However, in the presence of multiple readers, RFID suffers from the so-called reader collision problem, mainly due to the inability for direct communication among them. In this paper, we propose a hybrid RFID and WLAN system; the RFID technology is employed for collecting information that is used for both localization and handover management within the WLAN, whereas the WLAN itself is utilized for controlling and coordinating the RFID reading process. In our system architecture, tag IDs of a RFID tag deployment are correlated with both location and topology information in order to determine the position and predict the next subnetwork of a Mobile Node (MN) with a reader attached to its mobile device. The role of the WLAN is to coordinate the readers when accessing the RFID channel for retrieving tags' IDs, hence compensating the persisting RFID collision problem among multiple readers. Numerical results based on extensive simulations validate the efficiency of the proposed hybrid system in providing accurate and time efficient localization and reducing the IP handover latency.