Advances in sensor networking and location tracking technology enable location-based applications but they also create significant privacy risks. Privacy is typically addressed through privacy policies, which inform the user about a service provider’s data handling practices and serve as the basis for the user’s decision to release data. However, privacy policies require user interaction and offer little protection from malicious service providers. This paper addresses privacy through a distributed anonymity algorithm that is applied in a sensor network, before service providers gain access to the data. These mechanisms can provide a high degree of privacy, save service users from dealing with service providers’ privacy policies, and reduce the service providers’ requirements for safeguarding private information.