The present invention relates to use of a smart antenna for a RF reader on a Radio Frequency Identification (RFID) system to significantly increase the operating range of the RFID system. The smart antenna can be an adaptive antenna array. The smart antenna comprises a plurality of antenna elements and, by combining the signals from multiple antenna elements, significantly increases the received signal-to-noise ratio. In a noise limited environment, combining the signals to maximize the received signal-to-noise ratio can be based on the maximal ratio combining (MRC) principle. To achieve the best signal quality, the received signal from each antenna can be phase-shifted such that the resultant signals from all antennas are in phase. In addition, the signal from each antenna can be scaled in amplitude based on the square root of its received signal-to-noise ratio.