Radio frequency identification (RFID) is a new material identification technology. RFID has a greater number of benefits than its predecessor, the bar code. It is not universally adopted in many industries due to its high cost hitherto. Whereas, RFID is advantageous because it does not require line-of-sight scanning, it acts to reduce labor levels, enhances visibility, and improves inventory management. This article briefly introduced component, principle and characteristic of the RFID technology, and analyzed and introduced more foregroundful application of RFID in modern logistics. RFID technology is combined with network technical and database technology, it will be extensively applied in stock tache, storage tache, transportation tache, retail tache of logistics system. In addition, this paper also discussed the factors which restrain RFID technology from being broadly applied. The uppermost problem faced by RFID technology is the cost of RFID chip, then it comes to the potential intervention of people’s privacy incurred by the use of RFID technology. Otherwise, lack of uniform criteria definitely affects the development of RFID technology.