Single particle tracking in three dimensions in a live cell environment holds the promise of revealing important new biological insights. However, conventional microscopy-based imaging techniques are not well suited for fast three-dimensional (3D) tracking of single particles in cells. Previously we developed an imaging modality multifocal plane microscopy (MUM) to image fast intracellular dynamics in three dimensions in live cells. Here, we introduce an algorithm, the MUM localization algorithm (MUMLA), to determine the 3D position of a point source that is imaged using MUM. We validate MUMLA through simulated and experimental data and show that the 3D position of quantum dots can be determined over a wide spatial range. We demonstrate that MUMLA indeed provides the best possible accuracy with which the 3D position can be determined. Our analysis shows that MUM overcomes the poor depth discrimination of the conventional microscope, and thereby paves the way for high accuracy tracking of nanoparticles in a live cell environment. Here, using MUM and MUMLA we report for the first time the full 3D trajectories of QD-labeled antibody molecules undergoing endocytosis in live cells from the plasma membrane to the sorting endosome deep inside the cell.